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How to spread your risk across different investments
Why putting all your money in one place is risky, and how Investfora lets you split it across different types of investment.
Why one investment is not enough
Imagine you have saved money and you want it to work harder than it does in a savings account. The natural instinct is to pick one thing and put all of it there. But that means everything depends on that one choice going right.
Spreading your money across different investments means that if one goes down, the others may go up, or at least stay steady. You are not betting everything on one outcome. This is called diversification, and it is one of the oldest and most straightforward ideas in investing.
The value of investments can go down as well as up, and you may get back less than you put in. That is true whether you have one investment or ten. But spreading your risk means the damage from a single mistake is smaller.
Investfora lets you do this easily. You transfer euros once to your account, and then you choose what to do with each part of it. Nothing is invested unless you instruct it.
The four types of investment you have today
On Investfora right now, you can choose from four different types of investment. Each one works differently, carries different risks, and suits different purposes. Knowing what each one does helps you decide how to split your money sensibly.
Fixed-term deposits are money you place with a bank for an agreed length of time at a rate agreed from the start. The bank pays you interest. Your money is covered by that country's deposit-guarantee scheme up to one hundred thousand euros per person per bank.
Business lending is different. Real businesses ask to borrow money. You choose which businesses and how much to lend to each one. Each listing shows the interest rate, the amount being borrowed, what secures the loan, how long it is for, and how risky it is.
Crypto is fifty coins at live prices that you can swap from euros in seconds and back again. You can start with as little as one euro. The price changes constantly, sometimes by a lot in a short time.
A simple way to think about safety and potential
Each investment exists somewhere on a line between safety and potential growth. At one end is a fixed-term deposit with a European bank. You know exactly what you will get. The rate will not change.
In between are business loans and trading. A business loan gives you a fixed interest rate and security, but the business might fail. Trading gives you the chance to respond quickly to market changes, but you can lose money fast if you get it wrong.
The key insight is this: money you cannot afford to lose should go somewhere safe. Money you can afford to lose, and where you have time to wait, can go somewhere with more potential but more risk.
For example, you might keep three months of living expenses in a fixed-term deposit so you know it is there. You might put money you do not need for five years into business lending. You might try a small amount in crypto to learn how it works.
How much should go into each type?
There is no formula that works for everyone. The right split depends on your circumstances, how long you can leave the money alone, and how much worry you can take.
A useful starting point is to think about what you need the money for. If you are saving for something you want in two years, a fixed-term deposit that matures in two years is sensible.
The first deposit into an Investfora account is a minimum of two hundred and fifty euros. After that, you can deposit any amount you like. This means you can start small, see how it feels to have money in different places, and adjust. You are not locked in.
Investfora does not give advice or recommendations about how much to put where. That decision is yours. But thinking through these questions before you deposit anything will make it clearer.
How to get started with spreading your money
The process is straightforward. You create an account and a reference appears in your dashboard. You transfer euros by bank transfer using that reference. The money arrives and matches, usually within one to three working days.
From your cash balance, you choose what to invest in. You might buy a fixed-term deposit, set up a business loan, swap some euros for crypto, or fund your trading account. You do all this from your own dashboard.
The beauty of this approach is that you can start small and split your money however you like. You might put half into a fixed-term deposit for safety and peace of mind. You might put a quarter into business lending to earn a higher interest rate.
Because nothing is invested until you instruct it, there is no pressure to deploy all your money at once. You can transfer your full amount, then spend time deciding how to split it. You can also change your mind.
What to check before you invest in anything
Before you put money into any investment on Investfora, it is worth looking carefully at what you are about to do. For a fixed-term deposit, check the interest rate, the term, and which bank is holding the money.
For a business loan, read what the business is asking to borrow for, how long the term is, what interest rate it is offering, what secures the loan, and what risk grade it has been given. There is no credit score on a listing.
For crypto, remember that the price is live and changes constantly. You can buy fractions of a coin from one euro. You own the coin directly. There is no middleman taking a cut. But the value can fall sharply as well as rise.
For trading, check the broker's platform, understand the assets you can trade, and decide in advance how much you are willing to risk. It is easy to move fast on a trading platform. Moving fast is not always wise.
Why Investfora makes this easier
Investfora is authorised and supervised by the CNMV, the Spanish financial regulator, under register number two hundred and forty-four. It serves both retail and professional clients. The platform is built to make it simple for you to spread your money across different investments from one place.
Instead of having accounts at a bank, a lending platform, a crypto exchange, and a broker, you have one dashboard. You transfer money once. You see all your investments on one screen. You can move money between types of investment as your situation changes.
The fact that nothing is invested unless you instruct it is important. You are not pressured to deploy money immediately. You can look at what is available, take your time, and make deliberate choices. This matters because good splitting of risk is a decision, not an accident.
Starting with two hundred and fifty euros means you can test the experience without a large commitment. You can see how the interface works, how deposits clear, how interest accrues on a fixed-term deposit, how a business loan listing looks.
Apri un conto
Versa euro quando vuoi e scegli cosa faranno. Puoi iniziare da una sola cosa e aggiungerne altre più avanti.
Scritto per Investfora, che fa parte di LIFT INVESTMENT MANAGEMENT SGEIC SA, iscrizione CNMV n. 244. Questo articolo è un’informazione generale, non una consulenza né una raccomandazione. Il valore degli investimenti e delle cripto-attività può diminuire oltre che aumentare e potresti recuperare meno di quanto hai investito.
