When could an investment make sense for me?
An investment enables you to participate in the economic success of a company . This type of investment can potentially generate higher returns than you can usually achieve on the market. On the other hand, you have to be willing to make a long-term commitment.
However, there are never higher returns without higher risk: When you invest in an investment, you must expect that you may lose all of the capital invested. Ask yourself what level of risk you basically want to take and whether you can really cope with losses. It is better to exercise caution and not to put all of your reserves on one card.
What are the dangers of an investment?
Investments can entail considerable risks for the investor.
Total loss: If, for example, the company goes downhill, the forecast payout will be lower or will not be paid out completely. If the issuer files for bankruptcy, this may result in the partial or total loss of your investment.
Liability: Depending on the situation, it is even possible that not only the amount invested, but also your other assets are endangered – this can go as far as personal bankruptcy. This risk is accepted by investors who, for example, finance an investment with a loan.
Further risks: Other risk factors are the costs of back tax payments or liability claims for which the investor has to be responsible for such a participation. Or the company gets into trouble and investors are forced to repay dividends received.
Usage: What can the investment bring me to an investment?
If the company is doing well economically, you as an investor will mostly benefit from distributions, a performance-related interest rate on your investment or a higher market price. At the same time, if business is positive, the value of your dispute credit also increases. This is relevant if, for example, you leave the company as a limited partner. Because this credit is then due, depending on the structure of the articles of association when leaving or in long-term installments.
Own duties: What obligations and costs do I have to face when buying an investment?
If you participate in an investment, you undertake to actually pay in the agreed subscription amount, i.e. your contribution. Often an issue surcharge , the so-called agio , is also due. In addition, in most cases there are additional costs for the investor. They arise in connection with the acquisition, management or sale of the investment. For example, entries in the commercial register cost money, and travel and accommodation costs can be incurred for attending shareholders’ meetings.
Termination:Can I return or sell the investment at any time?
Since investments are not securitized, such as shares, they cannot easily be sold or assigned ; as the expert says, they are not fungible. In short: there is no functioning secondary market for this type of investment. Therefore, you should view an investment as a long-term investment.
As a rule, it is also not possible to return an investment or to cancel it before the end of its term . A transfer of the investment is- if at all possible- usually linked to certain conditions, for example that the general partner in a limited partnership must consent.
Notification and publication obligations of the provider: What information does the provider have to provide me with?
Anyone who wants to put an investment on the market is fundamentally obliged to prepare a sales prospectus and have it approved by BaFin before the start of sales . He must forward this prospectus to all interested parties for this investment during the duration of the public offer. In addition, the provider must provide a current version of the asset information sheet in text form.
The law stipulates that the sales prospectus must contain all factual and legal information that potential investors need so that they can make an accurate judgment about the issuer of the investment and the investment itself. The aim is that you, the customer, can assess the risks associated with the investment, the prospects for a capital repayment and the returns, as well as the costs and commissions that are also associated with this investment.
Distribution channels and providers: Where can I buy investments?
You can buy investments either directly from the provider or from savings banks , banks and other financial sales companies.
WORTH KNOWING FOR INVESTORS
Who are investments for?
Investments are suitable for investors who want to tie up their assets over the long term . However, you should always be aware that this involves significant business risk . In the worst case, this can result in a partial or total loss of your investment or your personal bankruptcy. If you want to invest your money for a short time or if you do not want to risk any losses on your investment, investments are not suitable for you.
Taxes: Are tax aspects relevant?
Taxes may apply to all financial investments. You should therefore consider tax considerations before deciding on an investment.