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How to Choose the ETFs That Fit You

By MPI5th November 2025Smart moneyaccumulating, cost, distributing, ETF, investing, physical, Replication, risk, synthetic, Tax, TER, UCITS

ETF Investing

ETF Research

How to Choose the ETFs That Fit You

Published: November 5, 2025

Starting to invest doesn’t have to be complicated—especially when execution costs aren’t fighting you. With trading fees as low as 0.14% + €3 on European markets and zero custody fees, the frictions you feel most are no longer at the broker. They are upstream—in the way you set objectives, select exposures, and control risk. This article lays out a complete, analyst-grade framework: from purpose and horizon to replication, TER vs. tracking difference, liquidity, taxes, hedging, and a disciplined implementation plan.

1) Purpose, Horizon, Constraints: the Investment Triangle

Every ETF choice sits inside a triangle of purpose (what you’re solving), horizon (how long capital stays), and constraints (risk tolerance, taxes, liquidity needs). Reverse the sequence and you get noise. Lead with the triangle and product selection gets easier.

Purpose: Are you building long-horizon wealth (retirement), a medium-horizon goal (home, education), or a buffer (emergency fund)? Each maps to a different volatility budget.
Horizon: Short horizons amplify mark-to-market risk. Long horizons make drawdowns survivable—if the allocation is appropriate.
Constraints: Tax regime, currency of liabilities, need for distributions, ethical screens, maximum drawdown comfort.

Ray Dalio frames diversification as the “Holy Grail”: reduce expected risk more than expected return. Warren Buffett counters that diversification can be protection against ignorance. Both are true—at different stages. Early on, default to breadth. With skill and proof, earn the right to concentrate.

2) When ETFs Are the Right Tool—And When They Aren’t

ETFs are access technology: low cost, transparent, tradable. They’re superb for equity beta, broad bond exposure, and systematic tilts. But they’re not always optimal.

Emergency funds & near-term cash: Prefer direct purchases of very short-dated government bills for precise maturity and rate control. Bond ETFs, by design, roll maturities and carry small duration risk.
Idiosyncratic convictions: If your edge is in a single issuer or niche, an ETF may dilute the thesis—use with care.

Outside of these cases, ETFs remain the default for most long-run portfolios.

3) The Core Allocation: Theory That Still Works

Seven decades after Markowitz and Sharpe, the core idea persists: pair growth assets with stabilizers. In ETF-land, that looks like one or two broad equity funds, one or two bond funds, and optional sleeves for real assets.

Classic 60/40 (modernized)

60% global equities (developed + optional EM), 40% investment-grade bonds (global aggregate with attention to duration).

All-Weather–style balance

~30% equities, 40–45% government bonds split across durations, 10–15% inflation-linked, 5–10% real assets (commodities/gold via UCITS/ETC).

Choose a baseline, automate contributions, and rebalance annually. Complexity is optional; discipline is not.

Local context: Short-term bursts are real—e.g., a BET/BET-TRN ETF has recently offered ~35–40% returns in a year. Wonderful, but design the policy portfolio for the next 10–20 years, not the last 10–20 months.

4) What Exactly Are You Buying? Index, Structure, Replication

4.1 Index definition

MSCI World (developed-only) is not FTSE All-World (developed + emerging). Sector tilts differ across providers. Read the methodology: country eligibility, free-float adjustments, small-cap inclusion, reconstitution rules.

4.2 UCITS and domicile

For European investors, UCITS funds domiciled in Ireland or Luxembourg are the standard. Domicile affects tax treaties and dividend withholding leakage (especially on U.S. equity exposure).

4.3 Physical vs. synthetic replication

Physical: holds the underlying securities; simple, transparent. May engage in securities lending—check the revenue split and collateral policies.
Synthetic: uses swaps to track the index; can improve tracking for hard-to-access markets but adds counterparty complexity. UCITS limits mitigate risks; still, understand the structure.

4.4 Full replication vs. sampling

Full replication owns all constituents—best for liquid, concentrated indices. Sampling owns a representative basket—common in very broad or less liquid universes; reduces costs but can increase tracking error in stressed liquidity.

4.5 Distributing vs. accumulating

Distributing share classes pay out dividends; accumulating reinvest them. Match to cash-flow needs and your tax context. Over long horizons, automatic reinvestment simplifies compounding.

5) The Cost Reality: TER vs. Tracking Difference

TER (Total Expense Ratio) is the sticker price; tracking difference (index return minus fund return) is the paid price. A 0.07% TER fund with poor sampling or wide spreads can cost more than a 0.12% TER fund with tight tracking and deep liquidity. Compare like-for-like over the same period and currency.

Large, liquid universes (e.g., S&P 500 UCITS) often show TERs near 0.03%.
Smaller or frontier markets can run to 0.50–0.70%.
Spreads, securities lending revenue, and tax leakage all feed into tracking difference.

Compounded over decades, a few basis points matter. You control this lever—use it.

6) Liquidity, Spreads, and Capacity

ETF liquidity has two layers: secondary (exchange volume, bid–ask) and primary (AP creation/redemption in the underlying). AUM and 3-month ADV are good first filters; then inspect the bid–ask spread and intraday premium/discount behavior.

Prefer funds with stable AP support and consistent spreads in volatile sessions.
Check multiple listings (Xetra, Euronext, LSE) if your broker routes across venues.
For very large orders, consider risk or NAV-based trades via your broker.

7) Currency, Hedging, and the Liability Side

Decide at the portfolio level how much FX risk you accept. Many long-term investors keep equity exposure unhedged (growth offsets FX noise) and hedge parts of the bond book to align with spending currency. Hedged share classes add a small ongoing cost; they reduce FX volatility but do not change expected returns.

8) Putting It All Together: Model Line-ups (Illustrative)

Global Core (accumulating)

70% Global Equity UCITS (World or All-World)
20% Global Aggregate Bond UCITS (EUR-hedged share class)
5% Gold ETC (UCITS-friendly)
5% Broad Commodities UCITS

Rationale: equity growth engine; bonds stabilize and match euro liabilities; small real-asset sleeve for regime hedging.

Quality Tilt (long horizon)

50% Global Equity UCITS
15% Quality factor UCITS (global)
10% Dividend growth UCITS
20% Global Aggregate Bond UCITS
5% Gold ETC

Rationale: systematic tilts toward resilient earnings and income; still anchored by a broad core.

All-Weather Bias (defensive)

30% Global Equity UCITS
25% Long-duration Gov Bond UCITS
15% Intermediate Gov Bond UCITS
15% Inflation-Linked Bond UCITS
7.5% Gold ETC · 7.5% Broad Commodities UCITS

Rationale: regime diversification: growth, disinflation, inflation, and commodity shocks.

Implementation discipline: automate monthly contributions, rebalance annually (or when weights drift by ±20% relative), document changes in an Investment Policy Statement.

9) Due Diligence Workflow (Repeatable)

Define exposure (index, region, cap range, factor).
Screen UCITS ETFs (domicile, provider, AUM, ADV, spread).
Compare costs (TER, 3–5y tracking difference, lending policy).
Assess structure (physical vs synthetic; full vs sampling; distributing vs accumulating).
Tax (withholding leakage, your personal regime, ISA/PEA/third-pillar constraints where relevant).
Operational (listings you can access, settlement, broker fees—e.g., 0.14% + €3; zero custody helps).
Write the rationale (1 paragraph). If you can’t explain it, don’t own it.

10) Advanced Topics: Factors, Bonds, and Real Assets

Equity factors

Quality (profitability, low leverage) and dividend growth pair well with a global core. Small-cap raises cyclicality; size positions modestly.

Fixed income

Duration is your macro lever. Keep the bond sleeve simple (aggregate + govies), then add inflation-linked if your liabilities are CPI-sensitive.

Gold & commodities

Use UCITS-compliant ETC/ETFs. Keep sizing measured (5–10%)—they hedge regimes, not day-to-day moves.

11) Behavior: Where Portfolios Live or Die

The best ETF line-up fails without behavioral guardrails. Write—and sign—three rules:

Loss rule: “If the equity sleeve draws down 25%, I rebalance to target, not de-risk.”
Gain rule: “If a tilt doubles, I trim back to policy weights.”
Change rule: “I change the policy portfolio only after a 30-day cooling period and a written memo.”

Larry Fink often notes: ETFs democratize access. The edge is not cleverness; it’s consistency at low cost.

12) A Short, Real-World Contrast

Two globally popular UCITS ETFs—one tracking MSCI World (developed-only), one tracking FTSE All-World (developed + emerging)—delivered different 5-year EUR outcomes (~low three digits vs. high nineties %). Neither is “better” in isolation; the index design, EM inclusion, and sector weights explain the gap. The “right” choice is the one that fits your purpose, horizon, and constraints.

Bottom Line: A Framework That Scales

Start with purpose, horizon, constraints.
Pick a core allocation and keep it boring.
Understand index, structure, replication.
Optimize real costs: TER and tracking difference.
Mind liquidity, taxes, and FX hedging.
Add tilts deliberately; size them modestly.
Automate contributions; rebalance annually; document changes.

Do these things at low cost—and let time and compounding do the heavy lifting.

Booking vs. Royal Caribbean – Two Travel Giants, Two Different Journeys

By MPI29th October 2025StocksBooking, investing, Royal Caribbean, stocks

Booking vs. Royal Caribbean: Two Travel Giants, Two Different Journeys

Published October 29, 2025 · My Passive Income

Two of the biggest names in global travel just reported results. While Booking Holdings (Nasdaq:BKNG) continues to climb on the strength of digital travel demand, Royal Caribbean (Nasdaq:RCL) finds itself navigating choppier waters, pressured by higher costs and softer pricing. Here’s how both players are positioned going into the final stretch of 2025 — and into 2026.

Booking Holdings: Flying Smoothly Above Expectations

Booking Holdings once again delivered a strong quarter, reinforcing the idea that travel demand remains resilient. The company beat expectations across key metrics and showed that global consumers are still prioritizing travel spending, even in an uncertain macro environment.

Headline results (Q3 2025):

Adjusted EPS: $99.50 (above FactSet estimate of $95.85)
Net profit: $2.75 billion, +9% vs. Q3 2024
Revenue: $9.01 billion, +13% YoY (estimate: $8.73 billion)
Gross bookings: $49.7 billion, +14% YoY (estimate: $48 billion)
Nights booked: 323 million, +8% YoY (vs. ~6% expected)

Q4 2025 outlook:

+4–6% growth in nights booked
+11–13% growth in total gross bookings
+10–12% revenue growth (slightly below analyst forecasts)

“Despite ongoing macroeconomic and geopolitical uncertainty, we’re pleased to see positive momentum, with steady travel demand so far in the fourth quarter,” the company said.

Stock snapshot:

+4.8% after-hours reaction
+2.6% YTD (still trailing the S&P 500)
Market cap: $165.96B
Forward P/E: 23.5× (vs. sector median ~17.7×)

What the analysts see: Booking continues to post impressive top-line expansion, with ~17.6% annualized revenue growth over the last three years. That said, the forward view is more measured: consensus expects revenue growth of just ~8.3% in the next 12 months. Translation: investors are paying a premium multiple for a company that is still growing — but not at “hypergrowth” levels anymore.

Royal Caribbean: Sailing Through Choppy Waters

For Royal Caribbean, the story is more complicated. Demand is strong, bookings are healthy, and 2026 looks promising. But short-term pressure from costs and pricing is starting to worry investors.

Headline results (Q3 2025):

Adjusted EPS: $5.75 (slightly above estimates)
Revenue: $5.14B (below $5.17B expected)
Ticket revenue: $3.64B (+3.4% vs. 2024)
Onboard & other revenue: $1.5B (+6% YoY; in line with expectations)
Advance onboard bookings: ~50%, with ~90% of those bookings done digitally

Cost pressures:

Net cruise cost per available day (ex-fuel): +4.8%
Higher fuel and maintenance costs
Normalizing ticket prices after a post-pandemic boom
Investor concerns about cash flow and future capex plans

Forward guidance:

Q4 2025 EPS forecast: $2.74–$2.79
Full-year 2025 guidance: $15.58–$15.63 per share
2026 outlook: “We expect EPS starting with a 17,” said the CEO

Royal Caribbean is also leaning heavily on product pipeline and differentiated experiences:

Record expected occupancy in 2026
New flagship demand from Star of the Seas and Celebrity Xcel
Strong interest in Royal Beach Club Paradise Island
Celebrity River itineraries nearly sold out immediately after launch

Stock snapshot:

-12% in pre-market trading after the report
Selloff driven mainly by margin fears, not demand fears

The message from the market is clear: demand alone isn’t enough anymore. Investors now want proof that cruise operators can protect margins, manage fuel and maintenance costs, and generate cash while still investing in new ships and destinations.

Two Travel Stories, One Sector in Motion

Looking at Booking and Royal Caribbean side by side gives us a snapshot of the wider travel industry in late 2025:

Booking Holdings: an asset-light, digital marketplace that scales globally with relatively low incremental cost per booking.
Royal Caribbean: a capital-intensive operator with physical assets, higher fixed costs, and direct exposure to fuel, labor, and maintenance inflation.

Both benefit from the same macro driver: consumers still prioritize experiences, travel, and leisure time. But the way that demand turns into profit is very different.

Booking is being rewarded for efficient growth, strong margins, and visibility into future bookings.
Royal Caribbean is being punished not for lack of demand — demand looks excellent — but for rising costs and worries about how sustainable current pricing really is.

Quick Takeaway

Booking Holdings: still in control, still highly profitable, still scaling. The market is paying a premium multiple for that clarity.
Royal Caribbean: healthy booking pipeline and record occupancy in sight, but investors are asking: at what cost to margins and cash flow?

Bondora Go & Grow: Investing Made Effortless for Everyone

By MPI28th October 2025Smart moneyBondora, Go & Grow, investing, passive income, welcome bonus

Bondora Go & Grow: Investing Made Effortless for Everyone

Published October 28, 2025 · My Passive Income

Bondora Go & Grow is designed to remove friction from investing. With daily growth, instant access to funds, and a simple experience built for real people (not just finance pros), it’s one of the easiest ways to start growing your money online.

Investing, Simplified

In a world where traditional investing often feels complex and intimidating, Bondora Go & Grow stands out as one of the most straightforward ways to grow your money online. Built for both beginners and seasoned investors, the platform allows users to earn up to 6%* annual return, with daily growth and instant access to funds.

No complicated settings. No hidden fees. No waiting months to withdraw your money. Go & Grow turns investing into something almost effortless: you deposit, you watch it grow, and you stay in control.

How Go & Grow Works

The idea behind Bondora’s Go & Grow is simple: you deposit money, and Bondora automatically diversifies it across thousands of loans issued to borrowers across Europe. Your earnings accumulate daily and can be withdrawn at any time, giving you both liquidity and predictability — a mix that’s rare in traditional P2P lending products.

Key benefits include:

Target return: up to 6%* p.a.
Instant withdrawals
No lock-in period
No management or withdrawal fees
Low minimum investment – start with just €1

Go & Grow was designed for people who want to build a long-term passive income stream without micromanaging investments every single day.

Who Is It For?

Bondora Go & Grow is ideal for:

People new to investing who want a safe, simple way to start
Experienced investors looking for a low-effort, low-volatility component in their portfolio
Anyone frustrated with traditional savings accounts that pay almost nothing

Whether you’re saving for travel, your first home, or long-term financial security, Go & Grow offers a practical, digital-first way to build towards those goals.

Transparency and Trust

Founded in 2008 and based in Estonia, Bondora is one of Europe’s longest-running peer-to-peer lending platforms. With more than €900 million invested and over 180,000 investors across 40+ countries, Bondora has built its reputation on transparency, simplicity, and reliability.

Every Go & Grow investor gets access to a clear dashboard showing:

Daily earnings
Total balance
Deposit and withdrawal history

This level of visibility makes it easy to understand how your portfolio is doing at any moment — without spreadsheets or manual tracking.

Why Investors Choose Go & Grow

Bondora’s mission is to make investing as effortless as possible. Unlike traditional P2P platforms, you don’t select individual loans or manage risk manually. The system does the heavy lifting for you, while you benefit from stable daily growth.

Go & Grow combines:

Automation – Bondora’s allocation engine puts money to work efficiently
Flexibility – withdraw anytime, with no penalties
Growth – daily returns that compound over time

It’s one of the closest real-world versions of “set it and forget it” investing, while still keeping your money accessible.

🎁 Investor Welcome Bonus

New investors receive a €5 welcome bonus automatically in their Go & Grow account after signing up. It’s a simple boost to help you get started.

How the bonus works:

A €5 bonus is added automatically to a new investor’s Go & Grow account after sign-up, but it cannot be withdrawn during the first 30 days.
To keep the bonus, the investor must deposit at least €50 within 30 days of registering.
After that period, if the account balance is below €55 (€50 deposit + €5 bonus), the bonus will be removed.
If the balance is €55 or more, the bonus becomes withdrawable — it’s yours.

In practice, this bonus encourages you to build a real starting position instead of just “testing with €1 and forgetting about it.” It rewards commitment and momentum.

Final Thoughts

In an age of financial noise and complexity, Bondora Go & Grow represents a refreshing return to simplicity. It’s an accessible way for anyone — from students to professionals — to start building wealth without needing to become a finance expert.

*Go & Grow is not a guaranteed investment product, and returns may vary. Capital at risk.

Whether you’re just getting started or you’re looking for a stable, easily manageable component in your portfolio, Go & Grow sits right between traditional saving and modern investing: simple, digital, and built for real life.

⚠️ Affiliate Disclosure

Some of the links on this page are affiliate links. This means that if you sign up or invest through them, I may receive a small commission — at no extra cost to you.

These commissions help support the site and allow me to continue publishing free educational content about personal finance, passive income, and investing.

Get rich in the stock market overnight. Myth or reality?

By MPI26th October 2022Smart moneyinvesting, money, myth, rich, smart, stocks

To be a successful investor it is essential to understand and overcome the biases that often lead to wrong investment decisions. A common misconception, especially among many new investors, is the belief that investing in the stock market can make them rich overnight.

The scenario seems real in that some investors end up making big gains at one point, but in this case, more often than not, the investment was made years ago.

Success is due to patience, emotional intelligence or vast experience rather than luck or a great trading opportunity that “struck” overnight. Financial literacy and staying up-to-date with the most important news and events are ingredients that also make the difference between investment success and failure.

The stock markets are constantly changing and it is not good to expect big and quick gains. This fact does not help you concretely, but, on the contrary, adds even more pressure on you.

That is why, before you actually enter the market, review the relevant information and be aware of the associated benefits and risks.

Perhaps along the way you will be pressed for time and this will make you want to “cut corners”, simplify complex decisions and thus become overconfident in your decision-making process. But keeping your expectations realistic not only gives you a balanced point of view, it also helps you be rational.

Moreover, because the decisions you make trigger certain processes, biases can actually prevent you from having an optimal approach (optimal does not mean perfect!).

At times when you seek to be perfect in this area, you begin to give too much importance to some things, leaving others on the outside.

With limited resources as an individual, it is better to seek an optimal and not a perfect allocation of them, because the inevitable errors will drain your energy and make you lose your focus.

You have to remember that in investing, you don’t aim for the impossible, you just have to eliminate the errors to become constantly better.

That is why, if you avoid major mistakes and have some understanding of the markets and the economy, the odds of becoming a successful investor are completely in your favor. But don’t think that this is the secret to becoming rich overnight.

Those who are extremely confident and also have the misfortune of having…luck in the beginning, believe themselves far above the level of those who have some experience and have also recorded losses among their gains.

But these lucky beginners will be the most shocked by the markets, and the return to the ground will be more painful for them.

By constantly learning about “investment psychology” you will know how to manage other emotional errors that can occur in any investor.

The most common prejudices and preconceptions that can lead to wrong investment decisions:

Confirmation – some investors are overconfident in their decisions, focusing on data that seems to confirm, rather than disprove, this.
Attraction to “sensational” information – as investors are bombarded with a plethora of information every day from financial commentators, newspapers and stockbrokers, it is difficult for them to filter it to focus on the relevant information.
Aversion to potential losses – some investors refuse to sell losing investments in the hope that they will get their money back. But, in addition to money, they can also lose their self-confidence.
Incentives – the power that earnings and incentives can have on human behavior often leads to exaggerated frenzy.
The tendency to oversimplify – in seeking to understand complex matters, investors tend to want simpler explanations, but some matters are inherently difficult to explain and do not lend themselves to simple approaches.
Hindsight – this state of mind prompts investors to eliminate objectivity in evaluating past investment decisions and inhibits their ability to learn from mistakes.
Confidence Transfer – Speculative bubbles are usually the result of groupthink and “herd” mentality. This concept describes a certain kind of inner comfort that an investor can feel when they think that “others are doing the same”, even if their decision is not necessarily a good one.
Neglecting probabilities – investors tend to ignore, overestimate, or underestimate the likelihood of outcomes other than those they have calculated. Most are inclined to oversimplify the process and allocate a single point estimate when making certain decisions.
Anchoring in the past – represents the tendency of investors to rely too much on a reference or information heard in the past when making a decision.

To remember :

Understanding these biases can lead to better decision-making, which is fundamental to reducing risk and improving investment returns over time.
Shortcuts especially do not work in the financial capital markets. Make sure you follow a disciplined, rational and balanced approach to investing, always keeping in mind the long-term perspective, company fundamentals and market analysis of the sector concerned.
Investors who want to take shortcuts often end up losing their invested capital and blaming the markets for their own preconceived decision.
The reason our mind tends to simplify or make decisions based on trusting certain situational patterns without applying its own filters is because it wants to reduce energy. Thus, if you are just starting out and want to become a profitable investor, you need to make sure you have the mental energy and patience to avoid these prejudice traps.
Financial literacy is what makes the difference between investment success and failure. Invest in yourself first, in your education, to make sure your money starts working for you and not the other way around!

How to effectively protect yourself from investment risks?

By MPI7th April 2021Smart moneyinvest, investing, reward, risk, risk protection

Risk/Reward

Every time we think about the idea of making investments, the first thing that automatically comes to mind is the notion of risks.

This way of thinking is typical for the field of investments and is much less present in our normal, everyday life.

Or not…?

How present is the concept of “risk” in our lives?

Obviously, certain risks normally exist for us no matter what we do, only we don’t think about them all the time and we don’t worry too much.

Because they are quite small, and most of the time they are even EXTREMELY small.

For example, how many times do you happen to climb the stairs and fear that you might stumble and break a leg? Or how many times do you walk down the street with fear of having a serious accident?

Probably quite rare…

And yet, such accidents happen, because we hear about them many times and we even see them on TV.

However, they are very rare (thankfully!), So it would be abnormal to live our lives in constant fear of them, always thinking about these risks and everything that could happen.

In terms of investments, however, the way of thinking is exactly the REVERSE!

Every time we are interested in a certain investment, we must analyze very carefully the situations in which things could go exactly the opposite of how we hope.

What would happen in those cases, how we would react to an adverse scenario, how much we could lose – all this must be part of our plan from the beginning.

For the simple reason that sometimes these investment risks do occur, no matter how carefully and inspiringly our initial plan was made.

Therefore, the question we need to ask ourselves is not “IF” but, rather, “WHEN” the risks associated with each investment will occur.

It is very important to find out the answer to the question “HOW MUCH” can we lose if those risks occur. Because depending on this answer we know how to plan and manage our investment correctly from the beginning.

In any investment, the main concern related to risks is that, in case they occur and we have losses, they should be as limited as possible.

Because all investors, absolutely ALL, face these investment risks and therefore sometimes incur losses.

Even the famous Warren Buffett, probably the biggest investor of all time, constantly in the top of the richest people in the world, reported a significant loss a few years ago as a result of his investment in Tesco.

What is interesting is that, although in absolute terms this loss seems huge (being several hundred million dollars), in fact it represents only about 0.2% of the net value of the company run by Buffett (Berkshire Hathaway).

In fact, over the last 50 years, Berkshire Hathaway has once lost 2%, with the rest being less than 1% of its net worth. These impressive results confirm that the winning strategy is to keep the risks to a low level, and therefore the potential losses.

How can you effectively protect yourself from risk?

Self-knowledge and study are the most important elements when it comes to investing.

If you understand how you react to risks and potential losses, it will be much easier for you to build a portfolio that fits your risk profile and helps you achieve good long-term results.

Here are 4 things you should always think about BEFORE making a certain investment, so as not to expose yourself to too much risk:

1. How much can you afford to lose?

How much money do you have available for these investments? And, most importantly, how many of them could you lose without significantly affecting your portfolio (or even your standard of living)?

In addition to answering these questions, you need to think about whether you are comfortable with the fact that you will make those amounts unavailable for a certain period of time, specific to each investment.

2. What is your time frame?

The time frame for which you intend to invest is directly related to those risks that you are willing to accept.

The longer you invest for the longer term, the more chances you have of recovering from any declines, so you could take, at least theoretically, higher risks.

On the other hand, as you get closer to your goal (eg financial independence), you need to prepare your portfolio properly so that you decrease the total level of risk you take.

3. How well do you know the investment you want to make?

The main risk of an investment is the investor himself. Or, as Warren Buffett says, “Risk exists when you don’t know what you’re doing.”

So, before you embark on a particular investment, get seriously informed and try to really understand how that investment works.

What are the main risks? What might not be going well? What are the positive scenarios and what are the negative ones?

And, most importantly, what will YOU do in each of these scenarios?

Once you find the answers to these questions, it will be much easier for you to make a concrete plan, which you can implement when the situation demands it.

4. How do you deal with these risks emotionally?

Your emotional ability to cope with change, unforeseen and potentially dangerous situations is very important.

If riskier investments stress you out and affect your daily life, you should probably turn to lower risk instruments.

Even if it is said that high profits are usually brought by investments with higher risks, you should know that there are enough profitable options to invest with medium or even low risks, so that, in the long run, you do not end up ruining your life and the health.

IN CONCLUSION, you can reduce the risks of your investments by investing:

– in a diversified portfolio, with investments that you understand

– which is adapted to your risk profile

– long-term and very long-term

– investing regularly, amounts with which you are comfortable.

This way you will be able to build an investment plan to help you get good profits, in conditions of limited risks.

How to invest: 5 basic tips for beginner investors in stocks

By MPI20th March 2021Smart moneybeginner, bonds, financial education, financial goals, investing, portfolio, shares

Investments for beginners

The development of technology has increasingly paved the way for ordinary people to global financial markets. But easy access for individual investors to international markets comes with the need to be educated about them and to understand the risks they take.

1. Do your homework

Once you have decided on which platform you want to invest, you have to do your homework. Investing means more than choosing a few random shares, with the hope that everything will go well on its own. A familiar example would be that when you buy a house you do not choose one at random from advertisements, but you will go to visit it. And to determine if it has a fair price, you look at the neighborhood, the real estate market in general and then you make a decision.

Similarly, before you start investing in stocks or any other asset class, you need to research the market to understand what you are investing in. Read about each asset and invest only when you feel comfortable that you can make a well-informed decision.

Thanks to the internet, nowadays it is easy to access information about listed companies. You can see what their income and history are, you can read their news and recommendations for investors. Sector or market information or even political news is also important – for example, we can now see how airlines, even the best performing ones, are affected by Covid-19 travel restrictions or how incentive packages economically affects markets. Being up to date with things that happen in the media helps you better understand the evolutions of stocks and trends in the markets.

2. Define your financial goals

Before you invest your money, you need to have a clear idea of what you want to achieve and how you will do it. You need to understand your personal goals as an investor. Do you plan to invest in the long term (10 years for example) or in the short term? What types of investments will help you achieve your goals? What are you ready to risk?

Investors should be encouraged to define an investment strategy that suits their needs, including their risk attitude. To mitigate risk, they should diversify their portfolio, adopt a long-term attitude and invest only in financial instruments with which they are familiar and for which they understand the risks they take.

3. Invest the money you don’t need in the next five years

Risk appetite should always be linked to investment objectives. Evaluate your current financial situation to understand if you can take the risk and always invest with money you will not need in the next five years. Never invest more than you can afford to lose!
You need to have a long enough time horizon for the investments you make to avoid market fluctuations. If you have an amount at your disposal, but you know that you will need this capital in the next 12 months, then the recommendation is to invest in a less volatile asset class, such as bonds.

Over time, stock markets have provided excellent returns to long-term investors. For example, since the establishment of the S&P 500 index (stock index composed of the top 500 American companies) in 1926, it has increased by an average of 10% annually. This is a much higher return than those generated by other assets, such as government bonds. You can also start investing in shares with a relatively small amount of money using a commission-free platform, as commissions can affect your profit margins.

One of the factors that discourages people from investing online is cost. The idea is still widespread that you need a lot of money to start investing. Moreover, equity investments are often perceived as an extremely complex process, involving technical knowledge and attracting expensive commissions. This is no longer the case. A number of online investment platforms, conduct transactions with shares without commissions, as well as fractional shares – you can actually buy a part of a share, a percentage of it, expressed in dollars. This offers the opportunity to invest $ 50 in high-value stocks, such as those of Amazon (which trades at about $ 3,000 per share), Tesla (over $ 700) or Alphabet (Google) – whose shares would cost about $ 2,000 a piece.

4. Practice before you start investing

Start with small amounts of money or practice with a virtual demo account, while learning the markets and defining your strategy.
Demo accounts of several online platforms allow you to practice without risk. Every user who registers receives access to a demo account, credited with virtual money, so that they can practice their strategies, learning to work with the platform before investing with real money.

5. Diversify your portfolio

Diversification is a risk management strategy and the proverb “don’t put all your eggs in one basket” explains the concept very well. In other words, invest in different assets or market shares to limit your exposure to a certain class of assets or financial instruments.
The purpose of diversification is not to achieve very high returns, but to manage risks. Think about what it would have been like if you had invested all your savings in the shares of an airline company just before the pandemic, which made travel difficult. You don’t want to be completely dependent on the performance of a single company or a single sector, maybe even the economy of a single country or continent.

Get 1% cashback bonus from Lendermarket

By MPI11th November 2019Newsbonus, buyback guarantee, cashback, Creditstar, investing, Ireland, Lendermarket, peer-to-peer lending

Lendermarket informed that a new cashback opportunity is available at the platform to all new registered participants.

Every new investor who register through this link at Lendermarket receives a bonus of 1% of the Net Deposited Funds during the first 60 days after the registration is successfully validated (Net Amount Deposited: amount of money deposited minus the amount of money withdrawn).

About Lendermaket

Lanched in june 2019 in Ireland, Lendermarket is a sister company of Creditstar Group AS, which is the parent company of Creditstar’s operational subsidiaries. The loans listed on the platform are issued in: Poland, Spain and Czech Republic.

Ragistration and investing

Both individuals and companies can register and invest. Individual investors are required to be at least 18 years old, be residents in the European Economic Area (or Switzerland) and have a bank account in such area.
Companies must have a bank account in a bank located in the EEA (or Switzerland).

Sign-up process: 2 steps: Registration and identity verification.

The minimum investment is 10 euros at 12% interest rate.

All loans at Lendermarket come with a Buyback Guarantee. Creditstar will buy back the loans that are more than 60 days overdue from their original due date at the nominal value of outstanding principal, plus accrued interest income and late payment fees.

The repayment depends on the term of the loan. If the term is 30 days or less, there will be 1 single payment at the end of the term. If there are two installments (60 days) or 3 installments (90 days), then the investor will receive 2 or 3 payments respectively. This is beneficial for investors that value more liquidity.

For other bonuses visit our Cash-back & Bonuses page.

Get 15 EURO cashback bonus from EvoEstate

By MPI28th October 2019Newsbonus, cashback, EvoEstate, invest, investing, real estate, real estate investments

UPDATE: The 15 EUR offer is no longer valid. The new offer for new registered participants is 0.5% cashback for 6 months after the first investment. You can register here for the new offer.

EvoEstate informed that a new cashback opportunity is available at the platform to all new registered participants.

Every new investor who register through this link at EvoEstate and invests 50€ (or more) will get a 15 EURO cashback bonus on their EvoEstate account.

For other bonuses visit our Cash-back & Bonuses page.

EVOEstate makes it easy for investors to access a variety of real estate investments with a relatively small amount of capital. The minimum amount for investment is €50, which enables investors to create a diversified portfolio. All loans are secured with a mortgage.

EVOEstate does not give out loans directly to the developers and it sources deals from other project originators, this enables to provide a many different types of deals in multiple countries. Consequently, EVOEstate founding team invests into deals theirselves and has skin in the game on deals they provide.

Iuvo peer-to-peer investment platform overview

By MPI14th October 2019Peer-to-Peer Lendingbuyback guarantee, invest, investing, Iuvo, Iuvo Group OU, peer-to-peer lending

Iuvo is a p2p platform based in Tallinn, Estonia, which allows its users to invest in loans, granted from Originators (nonbank financial institutions – Easy Credit, Viva Credit, iCredit, BBG , Fast Finance). The Investors can make a motivational profit, and the Originators benefit by the extra funds to help them expand their business.
After the loan is granted by the Originator, it is uploaded on iuvo, where the Investors can see it and choose to invest in it. The Investor receives their profit from the principal with interest after the installment is payed off.
In case the Borrower stops paying the loan, the buy-back guarantee activates immediately and the Investor gets their investment back.

Iuvo Group OŰ is a company, licensed by the Financial Supervision Commission of Estonia, according to Decision № 4.1-1/133 of the Management board of the Commission. Iuvo Group OŰ is regulated credit intermediary from the Estonian Financial Commission.

IUVO strives to provide investors with a world-class user experience through its diversified credit portfolio of trusted originators, as well as superior platform simplicity.

Iuvo is a Latin word that means “to help”, “to save”.

Who can invest at Iuvo?

Iuvo is a platform that is open to individuals and companies.
The individuals must be at least 18 years old, and they need to have a valid bank account within the European Union or third countries that are currently considered as having equivalent AML/CFT systems to the EU.
For the companies it is required to have a valid bank account within the European Union or third countries that are currently considered as having equivalent AML/CFT systems to the EU. Their data and funds origin, according to the Anti-money laundering and Financial Terrorism policies and regulations mentioned above. (AML/CFT).

How can funds be deposited to the investor account at Iuvo?

You can make a deposit to your iuvo account by some of the following methods:
– a bank transfer from your bank account with a payment order or by using your online banking;
– at the cash register of a bank;
– a transfer, made by using electronic money services such as: Paysera, ePay, Transferwise, Currency Cloud, Revolut, etc.
Please, bare in mind that there is no minimum or maximum amount of money you can deposit.

You can find our bank details on you account–>”Deposit“. Please, follow the instructions.

You can invest in three different currencies at the same time: BGN, EUR, and RON. It is necessary to make a bank transfer to the corresponding account.
Please, bare in mind that right now Iuvo do not offer currency conversion.

You have two investing options in iuvo – manual and automatic.
The manual investing includes: credit details review; choosing which particular credit to invest in, adding to your Cart and confirming the investments.
The Auto-Investing option includes: creating a portfolio, where you can apply certain filters. After you start Auto-Investing, the software invests in loans that fit your criteria.

The minimum amount you can invest in the Primary Market is as follows: 10 BGN, 10 EUR, 25 RON. There is no minimum amount for investing on the Secondary Market.

Iuvo fees

The platform does not have any charges for investing, making a deposit, or withdrawal. The only charge that may apply is when you sell a loan on the Secondary Market – 1% of the amount.
Please, bare in mind that this does not include any charges that your bank may apply.

The credit rate scores

One of the methods by which the originators control the risk, is using a credit rate score system. This is a procedure of classifying every credit in different categories, based on the default probability (the probability the borrower to stop paying off their loan).
All loans in iuvo have a score rate. This is needed so the credits from different originators can be compared.

The credit score rates in iuvo are:
A 0 – 4% default probability
B 4 – 10% default probability
C 10 – 18% default probability
D 18 – 25% default probability
E 25 – 35% default probability
HR above 35% default probability

All loans listed on the platform have the so called buy-back guarantee. This means that the Originator is obligated to buy back the credit from the investor at its nominal value in case the borrower stops paying off their loan. The Originator will restore the investment back to your iuvo account.
The buy-back guarantee activates on the 61-st day, counted from the date of the first unpaid installment.

Withdrawals

In order to request a withdrawal, you need to verify your identity and address. You can do that by applying the following documents:
*for Individuals
– ID Card – both sides of your ID Card or Passport;
– current utility bill, addressed to you or
– official document from the Authorities or
– other documents, confirming your address;
*for Companies
– ID Card of the account’s owner – both sides or Passport;
– A current status certificate or Commercial register extract;
– A document from the Authorities that is addressed to the company (confirming the address);

You can attach your documents through the platform in the “Documents” section.

Regarding the Anti-money laundering policy of the European Union, you need to verify your address in order to withdraw money from your iuvo account.
You can request a withdrawal at any given time from the “Withdraw” button. You can only withdraw the funds that are not invested at the moment.

You can cancel your withdrawal request from “Withdraw” button -> “Withdraw History.

All withdrawals from the platform are processed within two working days.
*Please, bare in mind that the bank transfer can take more time, depending on the bank’s conditions.

You can only transfer funds to a bank account that you have deposited from. If you have transfered money from more than one bank account, you will have the opportunity to choose which one to transfer the funds to.

Monethera peer-to-peer crowdinvesting platform overview

By MPI24th June 2019Peer-to-Peer Lendingbuyback guarantee, crowdfunding, crowdinvesting, invest, investing, Monethera, peer-to-peer lending

Monethera, based in Tallinn, Estonia, started as a private investment fund in 2017, and as of now has become one of the leading platforms in the industry of “Finance 2.0”, which offers investors from all over the world high-level investment opportunities via crowdinvesting marketplace.

With Monethera it is very easy to become an investor. All you need is to register on the website and choose one or several investment projects online. Monethera platform makes it easy and comfortable to start investing in high- tech, energy, real estate or other projects with help of background information, situational analysis, development prospects, market overview, repayment schedules and other important data attached to each project by the Monethera team.

If you invest for the first time at Monethera don’t forget that you can get € 5 and a 0.5% cashback bonus for the investments made in the first 180 days, more details HERE.

With start of the Age of Information and growing power of crowd-investing online marketplaces such as Monethera, investing has become easy and painless. You don’t have to be a professional in financial sphere or have a significant amount of money to make profitable investments in various projects. To diversify your investment portfolio, you’ll need as much as 100 EUR as a minimum investment.

Who is eligible to invest?

Private investors can use platform and start investing without any verification, but in order to withdraw profits they have to provide documents and undergo verification process.

Monethera is more focused on European projects, that is why all the investment accounts are offered in EUR only. Payment in other currencies will undergo conversion to EUR at our bank’s rate. Please note that investors can only make payments from their own private bank accounts.

Investing

Investing at Monethera is very simple: create an account, choose one of the selected investment opportunities and the amount of money you want to invest. The entire investment process takes place online and requires just a few minutes of your time. According to established schedule, you will be receiving fixed interest payments. The minimum investment is just 1 EUR per project.

At Monethera you can create diversified investment portfolio without having to invest large amount of money. All you need is as little as 1 EUR invested in a single project to start your investment journey. Later on you will be able to reinvest your income from successful investments in other projects to make your portfolio more diversified.

The minimum funding deposit is 100 EUR.

Investors who use platforms with shared IBANs (like Transferwise and some others) must send Monethera a payment proof in order of being identified.

As of now, credit cards as a mean of adding funds to investment account are not supported by Monethera. It is also not possible to use Western Union, crypto-currency or other ways of money transfer. Monethera doesn’t accept any third party funds. All funds must come from the bank accounts of registered investors.

How does the buyback guarantee work?

The buyback guarantee means that any Monethera participant can reclaim invested money from any of his or her invested projects and instantly receive it. Cost of performing a buyback is shown in the project description.
It should be noted that in some cases the cost of buyback makes a considerable percentage of the invested assets.
All interest payments transferred to participant’s investment account prior to buyback operation remain in possession of the investor.