Making an investment plan

Making an investment plan

Most people buy their first share or fund as a trial. But if you really want to start investing seriously, it is important that you have an investment plan. Because the more you invest, the more you can lose. A good investment plan gives you more chance of long-term success.

 

Above all, be honest with yourself

You do not need to work out an investment plan in detail. Main points are enough. First and most important question to ask yourself: “Can I really afford to lose the money I want to invest (now and in the future)?” You will surely understand that a ‘no’ as an answer means that you should invest less or not at all. After all, investing involves risks. It is also important for the further design of your investment plan that you are honest and realistic.

Then ask yourself the following questions

  1. What is your investment goal and when do you want to achieve it?

    With a clear goal, you will be more motivated to make a good investment plan, and to actually implement it. For example, do you want to build capital for a round the world trip, do you need to pay for your children’s education or do you want to pay off your mortgage? And what does it mean to you if you don’t meet your goal?

  2. What return will you be satisfied with, but also: how much can you afford to lose at most?

    What final capital do you think you will need? Then you know roughly what average return you need to achieve this and what risk is involved. Can you run that risk? You must realise that investing is only suitable for the long term and that you will therefore have to be patient. 

  3. Which investment categories will you use?

    Will you go for individual stocks and bonds? Will you opt for investment funds and ETFs? Or are you interested in complex products such as options and turbos? It is important that you know the features of the investment categories in which you invest well. Before investing in complex products, it is important that you already have a lot of experience in investing in non-complex products (shares, bonds, ETFs and investment funds).

    Tip: For complex products such as options and turbos, you must first take an exam in Internet Banking. You can find more information about complex products in our Investors Academy.

  4. How will you spread your risk?

    You probably don’t have all your money in a single share. But have you really consciously thought about spreading risk across investment categories, sectors, regions? Also include that spread in your plan. For inspiration: an example of the spread that ABN AMRO experts use

  5. How much time do you want to spend on investing?

    Especially if you actively start investing in shares or options, for example, you will lose a lot of time tracking your investments. Do you really want to spend all that time on it? If not, it might be better to see if investing in investment funds and ETFs is right for you. Read more about ETFs and investment funds in the Investors Academy.

  6. Are you willing to learn from your mistakes?

    Every investor makes mistakes. Learn from them. Are you looking for the cause of a disappointing buy or sale? Especially with complex investment products, it is important that you always analyse what happened, because the losses can be large. So stay critical of yourself: Did the process go as you expected? Did you have the right expectations? Did you take action on time? Did you follow your investment plan?

  7. What information are you using for your choices?

    Get as much information as possible from the sources you use, such as our stock market trends and investment update, our fundamental (share) opinions in Internet Banking or the technical analysis in My Dealingroom. Make sure you always proceed in the same way. Then you can check afterwards what information was useful and what was not.

  8. How and when do you determine whether things are going well?

    Decide in advance when you will determine whether you are properly implementing the agreements with yourself, for example once a month. And check annually whether your investment plan is still correct. Always include the costs incurred in your annual analysis.

    Tip: Write down these agreements with yourself. Hang this somewhere so that you can see the agreements regularly.