The Best Investment For Five Years! The investment for five years is just like the investment for three years a medium-term investment. The same types of investment are therefore generally recommended: equity funds with a high willingness to take risks, fixed-term deposits for security-oriented and real estate crowd investing for self-determined investors. A mix of different asset classes can also be considered.
What is the best investment for five years?
It should be noted that overnight money accounts are even less worthwhile for five years than for three years. With a more extended period, it is easier to “write off” the money for now and therefore, it is less likely that you will misjudge yourself and need the cash beforehand. Besides, the interest rate differences between overnight money (for which the interest is not fixed and can therefore become smaller and smaller) and fixed-term deposits have a stronger effect at five years than at three years.
With a five-year investment, a fixed-term deposit is recommended even more if the saver needs his money precisely five years later. Investors benefit from planning security because they know exactly when they will get the investment amount back, avoid price risks such as those on the stock market, and secure their income. After all, they agree on a fixed interest rate with the bank.
Equity, fund or equity fund investments are more suitable here than with shorter terms. Because if savers have several months or even years up and down when investing money, the exchange rate risks can be better cushioned. However, if there is no time flexibility, this is not advisable, as in a bear market (phase of continuously falling prices) a sale can lead to losses.
Real estate crowd investing gives you more planning security. Fixed terms are always specified here, which often range from one year to 5 years. In contrast to crowdfunding, crowd investing is a financial investment with prospects for returns. The return prospects can keep up with those of stocks. At the same time, however, private investors must also consider the risks of real estate crowd-investing. For self-determined investors, this is an excellent way of investing money for up to 5 years. However, not all of the money should be put on one horse here either.
What additional alternatives are there with an investment horizon of 5 years?
In addition to fixed-term deposits and stocks, investments in gold are also possible for a more extended period and flexibility in terms of time. However, the precious metal is also very volatile, and sometimes even more volatile than stocks. In return, it protects against stock market crashes and increases in value when financially uncertain times prevail. However, there is no interest or dividends when investing in gold. Taxes are a significant advantage of investing in gold: if you make a profit by selling gold bars or coins, it would not be must for you to pay any income tax on the profits made if you have owned the precious metal for more than one year.
The Agony Of Choice: Personal Investment Goals Play The Main Role
Overall, you are very flexible when investing money over five years and can move in various directions in terms of the risk-return ratio. To decide which of the possible forms of investment is the best for you, you have to define clear investment goals. On this basis, you can find the best investment for the years to come. Among other things, the investment amount, risk tolerance and expected return are essential.
TIP! From a specific investment amount, it is worthwhile to invest in several asset classes (e.g. stocks and real estate crowd investing).