Thanks for providing input on step 1 and step 2 …
How to Invest - Step 3
Before deciding whether it makes sense to invest together some important steps…
Yes - you are an optimist
Overall I am optimistic about the world
Yes - you are an investor
An investor is interested in generating attractive long-term real returns by following a disciplined, continuous and cost-efficient strategy of buying shares and/or bonds issued by companies with a sustainable business model at time-averaged prices, ideally holding those assets forever.
Start to invest
What are the benefits of a long-term investment strategy?
Building a nest-egg with constant monthly contributions
Building a reasonable amount of capital from monthly savings is inherently long-term and driven by the benefit of compounding. Since equities and bonds with high real interest rates offer the best expected long-term gains they are the only relevant investment choice. Markets do however fluctuate in the short-term. In our humble opinion nobody knows when markets will go up and when will they go down. The only evidence we have is that they are going up (significantly) in the long-term. When your investment generate sizeable annual returns (our target rate is 8%) your capital will grow substantially by your own contributions but even more by the constant accumulation of annual returns (the so-called compounding effect).
A simple example to become a millionaire
Please check out the maths of this simple example: if you invest USD 700 monthly over a 30 year period at an annual yield of 8% you have cracked the USD 1,000,000! If your annual return is less, e.g. 4% you only generate half the amount and the majority comes from your own capital contributions.
Why are we confident to achieve our target returns of > 8%?
Interested investors are encouraged and should feel free to review and test the long-term investment principles laid down in our "Ten Commandments for the Intelligent Investor for the 21st Century" themselves. Implementing all the elements is not entirely trivial but it can be done, so we would congratulate you on such a move. We have been investing our own funds following the investment principles of the BVIP since 2011, consistently generating yields of 8% and above. We are having a substantial part of our own net worth in the BVIP. Protecting our joint capital at all times is top priority. We are in this for the long-term and see ourselves in a true partnership with our investors.