My name is Elena Kabatchenko and I am the founder of the company Finance Guide.
Finance Guide does what its name suggests – provide the financial guidance to the internationals in Denmark. We are not giving recommendations to the client regarding specific products in e.g. investments. Instead, the client learn about rules and laws in Denmark regarding personal finances, so that they can solve their financial challenges themselves. We do that through free articles, online courses and individual consultations.
What do you actually risk by investing in securities in Denmark?
The interest rate on the deposits in Danish banks in 2018 is close to 0%. The only way to put money to work in Denmark is to start investing.
Real estate, securities, gold and even art are all examples of possible investment opportunities. However, today I want to talk with you about investing in stocks.
Stocks and investment funds that invest in stocks have a number of advantages over other types of investments, especially for people, who are just starting out with investing:
Diversification: Spreading the risks a-la “do not put all your eggs in one basket” is much easier with stocks. Even for a small sum of money, you can buy several shares or a certificate of an investment fund and thus get instant diversification. Not so easy to do with e.g. real estate investments.
Liquidity = easy to sell. If you invest in exchange-traded stocks or investment certificates, you can sell them from day to day when you need money. Whereas sale of real estate or art takes much longer time.
Lower entrance barrier = suitable for beginners. You can start investing in securities with a much lower amount. 5,000 DKK is a fine starting amount for investment in securities.
Ease of handling. If you buy real estate for investment purposes, you will be exposed to communication with your tenants, you are responsible for repairs in the apartment and you bear the risk of “no rental income”, in case of there are no tenants in your apartment for a period of time. Investing in securities happens online and you don’t need to put much effort into them, if you are a passive investor.
However, investments in stocks and investment funds are associated with a number of risks:
The risk of falling stock prices
The risk of bankruptcy of the company whose shares you bought
The risk of bankruptcy of the bank or the platform through which you bought shares
Elena will be presenting on October 25th on Investments & All Things Financial. To sign up please click HERE. There I will give a short presentation and will be available for one hour to answer all your questions regarding money in Denmark.
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