Investments

The last quarter of the year has begun. Did you know that Q4 is always the quarter with the highest consumer spending? This is due to the many holidays, vacations, and Christmas, when people reward themselves and others for their hard work. However, Q4 is also historically the quarter when most investments are made, and stock prices tend to rise. Many of us hesitate to engage with the topic of investing. Often, you hear that it is too risky or complicated, and many believe that by doing nothing, you can’t go wrong. This view is only partly true – when you consider inflation, which reduces the purchasing power of your money month by month, it becomes clear that “doing nothing” is also a form of risk. The most important step is to overcome the fear of the unknown and take the time to engage with financial topics.

This blog is for everyone who is thinking about investing but doesn’t know where to start. The points mentioned here form the basis for understanding the subject. Only once you have grasped these basics can you begin to explore specific investments and make informed decisions.

In recent years, when inflation rates were sometimes close to 10%, your money lost purchasing power at the same rate. This means you can buy 10% less than you could a year ago. Investing is the only way to protect and grow your money in the long term. However, investing should never be an “all or nothing” decision. No one is forcing you to invest all your money. The first step is to gradually acquire knowledge and make sensible decisions. Don’t rely solely on the opinions of friends, influencers, or financial advisors. The latter, in particular, often have their own interests, as they promote products that give them the highest commission. In the end, you alone are responsible for your investments, and you bear the profits or losses yourself.

A conversation with friends or family about investments can be valuable – but only if you have already acquired some basic knowledge. There is nothing worse than starting a conversation with, “I want to invest, but I have no idea how.” This often signals to the other person that, in the event of a market downturn, you might blame them for any losses. So, prepare yourself before having such discussions. If your conversation partner notices that you have done your homework and understand the basics, the exchange can be much more constructive. In the end, only you are responsible for your decisions.

A fundamental tool for investors is knowledge of historical movements and market cycles. Markets often follow certain patterns that repeat over time. Looking at the past can help you better understand how markets behave in specific situations. Recognizing patterns is often simpler than you might think. If studies show that investors tend to invest more frequently in Q4, this can positively impact market prices. Of course, this is a simplified example, but it’s a start. Also, consider the state of the world – global developments, political tensions, and economic indicators are valuable clues.

It’s helpful to not only follow short-term trends but also keep an eye on long-term developments. The ability to recognize trends and cycles can make all the difference. For example, in times of high interest rates, investors often prefer safe, fixed-income investments, while during periods of low interest rates, riskier investments like stocks become more attractive. Examples such as the boom of dot-com companies in the late 1990s, which ended in a bubble, or the hype surrounding meat substitute products like Beyond Meat, whose stock price fell significantly after an initial surge, show how important it is to remain realistic and not be blinded by short-term trends.

But some trends evolve over time to become an established part of the financial world. One example of this is Bitcoin, which was initially considered a speculative “nerd object” but has since established itself as a serious investment asset. Today, it is not only held by private investors but also by companies, banks, and even countries. Such developments show that it is worthwhile not just to follow the current hype but to observe which trends have the potential to become a new standard.

Matze’s final tips: Start small and stay patient. Investing is not about “getting rich quick,” but about sustainable wealth building. Set realistic goals and don’t let short-term market fluctuations unsettle you. Making mistakes is normal – use them as learning opportunities. I’m often asked about financial topics and am still unsure whether I should write more on this subject. Let me know your thoughts… stay tuned.

Legal notice: This blog reflects my personal experiences and opinions and does not constitute financial advice. I am not liable for decisions made based on this blog. Every investment carries risks, and you should do your own research or consult an independent financial advisor before making decisions.