ETF: How to get started without making mistakes when the equity markets drop?

Despite the current volatility of the markets, it remains possible to start on the stock market by limiting the risk of breakage. Thanks to the ETFs, these easy and well diversified funds, you can invest cautiously, even in troubled period. Here are the good reflexes to adopt to get started without making an error.

Ready for the big jump? Starting to invest in the financial markets at present may seem very perilous. Indeed, following the earthquake launched by Donald Trump on April 2 on the recovery of customs duties, stock market tremors are always felt. Large clues like the S&P 500 or the Dow Jones are struggling to find their level of Krach before, and have displayed a performance at half mast since January 1. Signals that can light a red light in the head of savers who had finally decided to take the plunge.

However, even in this temperate period, it remains possible to throw yourself into the water by limiting the risk of damage. In this area, the golden rule remains the diversification of your investments. By avoiding putting “all your eggs in the same basket”, as the adage says, you reduce the risk of losing everything if one of the baskets were to crack. On this point, investment in ETF (or “trackers”) can be an interesting solution.

Instruments by diversified nature, and therefore, less risky

These financial instruments allow you to invest in a basket made up of a multitude of shares, whether for example actions in the same sector (industry, new technologies, real estate, etc.), the same geographic area (Europe, emerging countries) or the same stock index (CAC 40, NASDAQ). Thus, the “Diversified ETF helps reduce risk by distributing investments in several sectors and geographic areas, rather than being exposed to the volatility of a single action. Diversification remains a key tool to amortize market fluctuations ”, Note Céline Haddad, expert in personal finance at the PLUM savings application.

In addition to the possibility of diversifying your share portfolio, ETFs allow you as a bonus to invest in several other large asset classes. Today there are indeed ETFs invested in bonds, in monetary funds, on raw materials (gold, oil) or even, as regards only the United States, in Bitcoin. Other potential investments that can amortize the shipwreck currently suffered by actions, for example.

Smooth your investment over time

Another precious advice: the smoothing of its investment. “This is the best advice to give to those who wish to get started on the financial markets with belt and suspenders: scheduled or fractional payments”recently explained Guillaume Berthiaux, president of Sofidy Private Management, in the “major savings meeting”. By investing in small sums regularly, you indeed reduce the risk of seeing all of your capital collapse in the event of Krach.

Finally, if you are looking for more advice for the duration of your investment, Capital is launching a new newsletter, “trackers”, to help you invest in ETF well. Twice a month (1st and 3rd Tuesdays of the month at noon), you will find in your mailbox our selection of the best ETFs on which invest in the medium and long term, a bi-monthly follow-up of our ETF portfolio and advice to optimize your decision-making, provided by three experts.

Invest on the stock market at the right time on the most efficient ETFs with Trackers, the capital investment letter dedicated to ETF, in partnership with Francebourse. By opting for an annual subscription, benefit from a sharp reduction on the price of the subscription. And take advantage of our launch offer.