Investing in stocks without risk doesn’t exist: we all know that prices can go up or down. But with the right approach, you can limit that risk and significantly increase the chance of a good return.
There are three golden rules for investing with as little stress as possible. We list them for you below.
Goed om te weten: beleggen brengt risico’s met zich mee. Je kunt een deel van je inleg verliezen. Resultaten die in het verleden werden behaald, bieden geen garantie dat die in de toekomst ook behaald kunnen worden. De informatie in onze blogs is algemeen en geen persoonlijk beleggingsadvies.
If we make a graph of the stock markets and dive into the distant past, it seems they have only gone up.
It may seem that way, but it wasn’t. There were huge dips in between.
In 2007 – 2009, during the financial crisis, the broad U.S. stock market lost 57% in value. And in 2013, almost 5½ years later, prices were back at the same level.
And from the recovery in 2013 to mid-2025, the price has more than quadrupled (+ 300%), which is a growth of 12% per year.
What do we learn from all these movements and figures? We learn that investing for the long term is the best strategy. This applies when prices are falling, and it applies when prices are rising.
If things are bad, you give it time to recover. That can take a few years, but it’s better to wait until 2013 than to panic and take your loss in 2009.
And when things are going well, you give it time for further growth. That 12% over 12 years between 2013 and 2025 doesn’t yield 12% * 12 = 144% profit, but 300%. That 12% return from the first year also yields 12% in the second year, and so on. So after 12 years, you end up with a 300% profit. That’s the effect of compound interest.
If you look through the peaks and troughs, you’ll see that the average return of a global stock portfolio has been around 8% per year over the past decades.
Just before the turn of the century, many people thought that investing in a dotcom company in Silicon Valley was a one-way ticket to financial independence for the extended family. By 2002, almost all of those investments were worthless.
It’s much wiser not to depend on specific developments or the hype of the day. If you invest your money in different companies, sectors, and regions, your investments can withstand a shock. If the dotcom in California goes under, food companies in Switzerland are likely to do better, because we continue to eat even during a financial crisis. This is how you spread your risks: if one company or sector performs poorly, companies in other sectors can compensate.
And a spread of risk is simultaneously a spread of opportunities. The more diversified your investment is across companies and sectors, the more likely you are to pick up that fast grower that gives your return a boost.
Prices rise and fall, especially in the short term. Suppose you invest a large amount once, exactly at a short-term peak, then you would make slightly less return. That’s why a wise investor ensures he is as little dependent as possible on these short-term price fluctuations. He does this by investing regularly.
If you invest regularly, for example every month, you invest at times when the stock market is temporarily high and you invest at times when the stock market is temporarily low. Whether it was a moment of relatively high or low prices, you only know that in hindsight. By investing regularly, you get an average purchase price (dollar cost averaging). And viewed over the long term, that average has always gone up.
The lessons of the past determine the advice for investing now. But history is what it is: past. It’s not a prediction of the future. It is, however, the best predictor of the future, we don’t have anything better.
So even wise investing doesn’t guarantee success. It is, however, the least risky and therefore most likely path to success.
Through the UpToMore Fund, you invest in a portfolio of ETFs that contain shares in hundreds of companies in various sectors and regions. With one click, you can automatically invest every month and invest wisely without effort or worry. This way, you significantly increase your chances of a good return!