With soaring inflation and savings products granting little incentive, now is a great time to start investing. And in addition to its business-friendly climate, stable economy, and skilled, multilingual workforce, Luxembourg is an excellent location for investors targeting the European market.
But before diving into investment in the Grand Duchy, what should beginner investors keep in mind?
Why to invest in Luxembourg?
Thanks to the political will to shape the economy and a generally favorable business climate, Luxembourg has over the years become a desirable location for companies wishing to invest in the development of their activities.
Being the largest investment fund center in Europe and the largest global distribution hub for investment funds, the Grand Duchy of Luxembourg gives a lot of investment benefits to its residents that other countries could have. Mainly, if you hold an investment for a period of six months or longer, you don’t have to pay capital gains tax on it, cryptocurrencies included.
Similarly, in Luxembourg, there is no monetary transaction tax on buying and selling stocks and shares on an exchange. Another great benefit is that Luxembourg is considered very safe for investors as it offers ideal protection.
Determine your goals
One of the primary requirements before investing is to determine your investment goals (these might be planning for retirement, having money for a down payment on a property, etc). Examine this against the lifestyle you want to enjoy, and what you need in assets, and it will become easier to work out the level of risk you need to take to meet those goals. Then, set up a time horizon for your investment (keep in mind: the longer the better).
Consider starting with Exchange-traded funds (ETFs)
ETFs are collections of stocks, bonds, or other securities bought and sold every day on stock exchanges.
An easy way to start investing is with a bunch of ETFs, which are very liquid and understandable instruments and can track a whole market.
ETFs are a reasonable way to gain diversification and professional portfolio management.
ETFs grant you diversification and exposure to a stock market index, bonds, precious metals, and other asset classes.
Investing in an ETF also means you do not have to identify and choose specific stocks. However, many investors could go on to invest in private stocks, and more speculative instruments, once they gain adequate knowledge of how the ETFs work.
Choose a reasonable investment provider in Luxembourg
It is vital to choose an investment advisor which offers reasonable commissions on trades. This indicates that as your portfolio grows and does well, you still enjoy a low overall cost of having the account. You should also choose an investment product that is as low-cost as possible.
Think long-term with your investments in Luxembourg
The last thing new investors should do is control their emotions during times of market volatility and evaluate markets in the long term. Numerous studies show that stocks, over the long term, majorly perform better than most other investments.
Being a strategic central European location and the most international population in the European Union, Luxembourg is an amazing place to invest in.
If you plan to structure your investments in Luxembourg, please contact your Damalion expert now.
