I have seen many discussions about how to invest but they seem targetted at the USA market. The main assumption is that one can expect to have a 6-7% return by investing in good ETFs. I have researched a little bit and I don't see how that can be achieved investing in the European bonds/stocks. At the moment the safest bet seems to park money in monetary/government bonds that however don't return more than 1.5% on average. Can somebody provide some suggestion references about good investment strategies with a low risk profile in an european context?
Ask HN: How to invest safely in Europe?
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Re: Ask HN: How to invest safely in Europe?
#2Without giving specific advice, here are some things to keep in mind:
- the same principles apply regardless of the market, you can just pick European equity or bond funds and add them to your portfolio (as long as they're available on your investing platform)
- you don't have to limit your portfolio to US and/or Europe, you can invest internationally
- historically the European markets have performed worse than the US. That won't necessarily continue in the future but keep in mind that you're making a similar assumption (that the future will be similar to the past) when you expect a 6-7% return from American funds.
- many of the the big US companies are international anyway - for example when you buy Apple stock, even though you're investing in an American company, you're betting on Apple's performance everywhere in the world including in Europe
- investing in companies that are traded in a different currency adds another moving part to the machine; you can be hurt or benefit from the movement of the exchange rates in addition to the stock/bond price fluctuations
Re: Ask HN: How to invest safely in Europe?
#3Only high risk (i.e. bonds of dangerous countries) have high yields. European economy is doing significantly worse than US. You can always invest in US equities ...
Re: Ask HN: How to invest safely in Europe?
#4Sign up on Interactive Brokers.
Re: Ask HN: How to invest safely in Europe?
#5Look into etfmatic.com it’s London based and you can specify where you’d like to invest
Re: Ask HN: How to invest safely in Europe?
#6Why do you want to invest in Europe specifically? There are European ETFs that track US indexes if that's what you're interested in.
Europe is a harder market for sure. There are less internationally recognized names, so you have to do more research.
Re: Ask HN: How to invest safely in Europe?
#7Why do you want to invest in Europe specifically? There are European ETFs that track US indexes if that's what you're interested in. Europe is a harder market for sure. There are less internationally recognized names, so you have to do more research.
There is an exchange risk inherent in that which will turn your real estate speculation into a currency speculation.
Re: Ask HN: How to invest safely in Europe?
#8In Europe the investment climate is substantially different than in the United States to the point that the same rules do not apply except for the most generic ones. The stock market isn't nearly as important a factor for the European economies as it is in the United States, the market is more fragmented and the typical stock market listed company is much smaller than its equivalent in the United States.
To some extent this is also why it is much harder to run a successful start-up in the EU.
Re: Ask HN: How to invest safely in Europe?
#9Sign up for one of those bonds where you can invest $1000 and get back $990, it’s so hot right now in Europe!
Re: Ask HN: How to invest safely in Europe?
#10Why do you want to invest in Europe specifically? There are European ETFs that track US indexes if that's what you're interested in. Europe is a harder market for sure. There are less internationally recognized names, so you have to do more research.
Because I don't want to deal with exchange rates risks as Jacquesm already pointed out.