10 tips on how to invest your savings

Investing what you have managed to save for your life is important: accumulating some of the wealth you produce, and thinking about the future, can ensure a dignified existence even once you have retired. Given the changes that have taken place in the social security system, the pension will no longer be almost equal to the last salary received, as happened until a few years ago.

What rules should you follow, then, to invest your savings fruitfully? Below are ten tips for making fruitful investments easily, quickly, and safely.

Consider what your real needs are

Defining your goals allows you to establish how much money you want to invest, for how long (time horizon), how much you are willing to risk, and predict the expected level of returns. The combination of these three factors constitutes the financial profile of the investor.

The time horizon also depends on your age, as well as the amount of savings to be invested: if it is short-term, it should be low risk. If, however, it is long-term, you can afford to accept greater risks given greater profits: time could help you offset any losses.

Risk appetite indicates the willingness to bear any losses caused by market trends. Risk tolerance, therefore, represents the percentage of assets you are willing to risk over a certain period, if the profit is not what you expected.

The final factor to consider is return expectations. It's important to make them realistic and remember that financial markets fluctuate quickly.

Find out about financial products and services

As obvious as it may seem, it is important to follow financial information when you decide to invest in the stock market: on TV, on the radio, in the specialized press online, and offline. Knowing all the details of the products you purchase is essential to best invest your savings and avoid unpleasant surprises.

Make sure your financial intermediary is reliable

Intermediaries, such as investment firms and banks, in Italy must be legally authorized. It is a form of protection for the investor, established by the Consolidated Finance Act (Legislative Decree No. 58 of 1998), the main law on the subject.
The authorization is given by the Bank of Italy or Consob, and is granted to:
• securities brokerage companies (SIM);
• Italian banks or banks from EU or non-EU countries;
• Italian savings management companies (SGR);
• intermediaries registered in the list provided for by art. 106 of the Consolidated Banking Act;
• EU and non-EU investment companies;
• stockbrokers registered in the single national register of the Ministry of Economy and Finance.
The intermediaries' activity can take place in the headquarters of one of the authorized bodies or the saver's domicile. In this case, again to protect the saver himself, the law provides that:
• the authorized person makes use of a financial promoter duly registered in the register;
• the saver can withdraw from his contract without costs within 7 days (right of withdrawal). This option, however, can only be applied to the placement of financial instruments and the individual management of portfolios.

Don't invest in what you don't understand

If you are unclear about the risks of an investment, don't invest. Before acting, you should always make sure that the person offering a product or service knows all the aspects and that they also convey the same awareness to you. Finally, we must ask ourselves whether the investment is fruitful for both parties, precisely for those who offer it and for those who purchase it.

The higher the potential return, the greater the risk.

Only after understanding that a greater possibility of profit translates into a higher risk to tolerate, can you correctly evaluate the boldest investment. However, some products are riskier than others, which is why you must:
• be careful when buying securities not listed on a regulated market. For Italian companies, you can check it on the Italian Stock Exchange website and the economics pages of the main newspapers;
• weigh the purchase of derivative instruments, covered warrants, and structured bonds;
• proceed with caution if the service involves "tax havens".

Don't trust unrealistic proposals.

Always remember point 5: a high return corresponds to an equally high risk. Don't trust anyone who offers you earnings that are excessively easy, fast, and linked to the participation of other people in the investment, the so-called "chain letters". Finally, be wary of any vague, vague proposal without detailed explanations on how the money raised will be used.

Never sign blank

The most obvious of the recommendations, yet it is not so uncommon to sign a contract without reading it first or, in some cases, just signing, leaving the compilation to the intermediary.

Rely only on the payment methods provided for in the contract.

Don't let yourself be persuaded to pay cash, don't sign checks without a name or payable to the financial advisor: he doesn't have to collect the sum in person. Instead, use bank checks or bank drafts, made payable (or endorsed) in the name of the intermediary for whom the promoter operates, i.e. the entity whose services are offered and equipped with the "non-transferable" clause.
You can also use a bank transfer, always remembering not to make it to the promoter.

Don't lose track of your investments

The characteristics of the product you purchased or your needs may change over time. Follow your investments, inform yourself, and carefully read the documents your intermediary gives you: having a precise picture of how you have invested your savings will help you understand whether it is appropriate to maintain the investment or liquidate it.

Use the internet judiciously

The convenience with which it is possible to conclude investments online is directly proportional to the risks, even unconscious ones, that you can run. Below are some final tips to avoid unpleasant surprises:
• do not communicate codes, passwords, or other data regarding your investment to anyone, not even the most trusted people;
• pay attention to the messages you receive: each of them corresponds to an obligation established for the intermediary to protect the saver;
• check that the person proposing the investment is identifiable;
• verify that the contact details provided correspond to those of the subject;
• don't forget to verify that the person is authorized, as specified in point 3;
• read carefully and keep the documents you receive carefully.