Whether you want to prepare for retirement, save for a shorter-term project, or simply make your money grow by actively contributing to the economy, having clear goals and planned deadlines will help you decide how to stay focused and motivated.
Think about the duration during which time you are ready to leave your money invested. If you plan to use this money or part of it in a few months, for that part a strategy based mainly on short-term bonds would be preferable.
On the other hand, if you can wait longer, you should consider investments that are overwhelmingly in equities that offer the potential for higher returns over the long term.
REMINDERS: The average gross yield on bonds denominated in euros from high-quality companies over the last 10 years is around 3.4% per year (before taxes, taxes and fees depending on each personal situation).
The average gross return on global equities measured in euros has been 9.5% per year over the last 10 years and around 13% per year for American equities (this return includes increases in value and dividends reinvested and before the collection of taxes, taxes and fees depending on each personal situation), or 3 times more than bonds.
The average performance of global stock markets in euros over the last 30 years can be approximated through global indices such as the MSCI World or similar indices. Here is an estimate based on historical data (Source: ChatGPT):
Over 30 years, the average performance of global indices in euros (dividends reinvested) is between 7% and 9% per year.
This includes periods of rapid growth (such as the 1990s and after 2009) and crises (such as the bursting of the dot-com bubble in 2000 or the financial crisis of 2008).
An average annual return of 7 to 9% over 30 years implies an accumulated return of more than 700% in 30 years (multiplication by about 8 of the amounts originally invested (before the collection of taxes, taxes and fees depending on each personal situation).
This performance reflects the ability of global stock markets to weather crises and deliver significant returns over the long term.
Decide now How much you can invest without affecting your short-term needs. Don't invest the amounts you may need in the short term. Markets allow for profits in the medium term but can be unpredictable in the short term given geopolitical and economic vagaries, it is possible to suffer losses in the short term and you should not find yourself in a situation where you have to sell everything at the wrong time. By ensuring that your investment does not endanger your immediate financial security, you can invest in the stock market with peace of mind and make well-considered decisions without pressure and thus optimize your performance.
Now it's time to get started! All that's left to do is go, train and make your first fictional investments on Skade!
First of all find out about companies and sectors in which you want to invest, take your time to document yourself and above all only invest in what you understand and that corresponds to your values. While this may seem complex, it is first and foremost a matter of common sense.
You can start by looking at their core figures like earnings, debts and growth prospects, the PE and their competitive advantages. In Skade, all you have to do is enter the name of a company in the search bar, a detailed sheet will show you the financial data of the company as well as its historical performances and you can also choose to receive information about them regularly.
Share with other investors and study the strategy of these companies, the quality of their management, their products and services, their sector, their competitive advantages, their image... to assess their potential.
In addition, by regularly reading the news articles offered in your “home” or “news” area, you will be able to better understand the forces that influence markets, the businesses that interest you and the economy as a whole.
Consulting the opinions, public portfolios, and analyses of other investors who seem serious and competent to you is an excellent starting point for your stock market research.
In Skade you can access independent information and in-depth studies based on your interests. Community exchange allows you to ask questions, discuss strategies, and share ideas, thus enriching your understanding of markets and helping you make more informed investment decisions.
It is also instructive to study other public portfolios, or even their purchases and sales, when and at what prices they made them and to be able to question their holders in order to understand their decisions, exchange your points of view and experience with them and thus make progress... Together we are smarter!
One of the best ways to learn to invest in the stock market is to start by creating and managing fictional stock portfolios. This feature provides you with a secure learning environment where you can explore how financial markets work without taking risks.
Learning by interacting with other individuals, comparing your performance and investment decisions while having fun is the best way to progress without stress and makes you smarter.
By using fictional portfolios, you can simulate buying and selling stocks, test different investment strategies, and see how your decisions could affect the value of your portfolio over time. This allows you to better respond to changes in stock prices and to understand the factors that influence the market and prices.
How does it work? Click on the “+new wallet” button, give it a name, define the amount of your liquidity as well as its currency (€, $,...), then decide whether or not to put it in public. If you decide to put your portfolio in public, it will be visible to everyone but as a percentage, only you will be able to see the amounts invested in figures.
Select the businesses you are interested in and set a price at which you buy a few shares, define for each share the number of shares you want to buy on the assumption that you will eventually complete this line in the future (average up or down).
Diversify your investments: Don't put all your eggs in one basket, it's common sense. Instead of investing all your money in one company, choose stocks from different companies and sectors (such as technology, luxury, health, energy, etc.) to limit the volatility of your portfolio. This means that even if a business is struggling, your other investments could make up for the losses. For example, if you invest in both a technology company and a food company, the fluctuations in one of these sectors could be balanced by the stability of the other. You can make a list of 20 to 40 companies that interest you and start by periodically investing small amounts in them for each one, it is prudent to avoid that no value in the portfolio represents more than 5 to 7% of the total in order to limit risks and volatility, you have access to companies around the world, you have access to companies around the world, there is no shortage of opportunities, take advantage of them.
Focus on your long-term goals: Remember that investing is a long-term strategy and short-term fluctuations are normal.
Analyze your successes and mistakes: Learn from each investment, whether positive or negative, share with others to get their feedback and refine your thinking and enrich your experience. Even the best investors make mistakes, and that's a normal part of the learning process.
Be active: Active stock market management has several advantages, including:
By identifying specific opportunities (undervalued stocks, sector trends, etc.), an active investor can potentially generate higher returns.
Active investors can adapt their strategy quickly according to market conditions. For example, they can reduce exposure to certain sectors in the event of a crisis or take advantage of an economic recovery in specific geographic areas.
Unlike passive management, which tracks an index regardless of the context, active management makes it possible to limit exposure to assets perceived as risky in times of turmoil or to avoid certain sectors or businesses that are problematic.
Active investors can invest in assets or markets that are not covered by major indexes, such as small businesses, emerging markets, or specific themes, offering additional diversification.
By analyzing businesses and markets in detail, active investors can take advantage of market inefficiencies (differences between the real value and the price of a share). This is particularly true in less liquid or less monitored markets, such as small caps.
Active management makes it possible to meet specific objectives of investors, such as regular income (via dividends), choosing or excluding specific companies (ESG...) or strict risk management.
In the event of a major downturn in the markets, an active investor can reduce losses by adjusting the portfolio, increasing liquidity, or by focusing on defensive assets.
However, these advantages are conditioned by the competence, responsiveness and constant information of the investor.
Be patient, thoughtful, and persistent: The key to successful investing is often patience. Don't try to get rich overnight. So you have to learn from your mistakes and those of others so as not to repeat them. You have to think and not get stuck emotionally or out of principle in dead ends, while persevering in reasoned and well-documented choices but also accepting to take your gains and losses. It's common sense... always common sense.
Don't panic about the fluctuations: The stock market goes up and down, it's important to stay calm during sharp rises and falls. Market variations are amplified by algorithms, traders and passive management, with more than half of transactions being carried out by computers, the rise maintains the rise and the fall maintains the fall...
When you are ready to invest with real money, you will need to choose an investment platform that suits your needs or consult your bank to explore their options.
But before taking this step, it is essential to train to better understand the mechanisms of financial markets and to exchange with other retail investors to share their knowledge, experiences and progress together.
As for athletes, chess or card players, training is a key to success and it is so much easier with several people, as a team and while having fun!
With Skade, you can simulate your investment strategies with play money, thus becoming familiar with risks and opportunities without pressure. This will prepare you to make safer and thoughtful choices when it's time to invest for real.
For more information on best practices to adopt when investing, do not hesitate to consult the AMF website.
“Investing means preparing for tomorrow, step by step. With Skade, you have all the keys to learn, experience, and move forward at your own pace. Take time to discover, understand, and improve yourself, without pressure or risk. Because the best investment is the one you make in yourself.”, your Skade team.