Hot "investment tips" come thick and fast. And they often follow similar patterns. Here's why you're better off tuning out when they sound anything like our five examples.
1) "This is the best strategy for 2025."
Around the turn of the year, it's high season for reviews and outlooks, for taking stock and making forecasts. Everywhere you find stories describing where the biggest returns were to be had last year - and where that might be the case in the current year. The conditional tense already shows where the problem lies: speculating with money is highly risky. In any case, the gambler's motto "new game, new luck" is no basis for a solid investment strategy.
It's quite simple: no one can look into the future. No one can know in advance how individual equity markets, for example, will develop. Not even with expert knowledge. Investment professionals regularly get their forecasts wrong. Anyone who follows them may lose a lot of money.
In any case, what matters for an investment strategy is the investment horizon, not the performance within a single calendar year. For investing in the equity markets, you need a long-term investment horizon and a strategy geared toward it.
2) "This stock will make you rich."
Some stocks stand out with their performance - over longer periods, too. Sometimes it's hard to keep in mind: plenty of small and large "market stars" that made headlines for a while are long since history. The US economist Hendrik Bessembinder examined the development since 1926 in a 2018 study. Over that period, the average length of time that companies were listed on the US market was just 7.5 years. The market stays, but the market participants are constantly changing.
Individual companies can fail, industries can lose relevance, and regions can fall into economic crises for extended periods. A solid investment strategy does not speculate about tomorrow's winners and also takes risks into account. This is achieved through broad diversification: with a global portfolio, return potential and risks can be brought into an optimal balance.
3) "Bet on dividends."
At the start of the year, the outlooks fill the finance pages. A few weeks later, investment tips around "dividends" regularly do the rounds. That's because from roughly March into May, most companies in Germany hold their annual general meetings and subsequently pay out the dividend.
Dividends are indeed a potential source of income for investors. You benefit from them with a broadly diversified equity portfolio. But focusing your investment strategy on the size of the dividend or the dividend yield is not a good idea. Concentration reduces diversification. And that worsens the balance between return potential and risks.
4) "This fund beats the market."
No one can see into the future. And that's why no one can reliably beat the market. That this cannot be done has also long been proven by financial-market research. Nonetheless, it is promised time and again.
It may well be that active funds, with their particular selection of securities, are at times better than the broader market. But it just doesn't work consistently and systematically. This is shown by long-term comparisons of such funds with stock indices, for example a study published by S&P Global in 2024: according to it, over a ten-year period around 92 percent of active funds investing in European equities were unable to outperform a corresponding index. For those investing globally, it was as high as around 98 percent that failed to do so.
5) "Right now is a bad time for equities."
Underestimating the equity markets costs a lot of return potential. This was shown once again last year. Hardly anyone had thought it possible how positively numerous equity markets would develop.
Of course, it doesn't always go straight up. That's why some people try to hit the ideal moments to get in and out with "market timing." But that goes wrong time and again. And great return potential is quickly missed.
It pays to stay the course consistently. Over the long term and on average, the trend on the equity markets has always been upward. That's because equities give you a stake in companies - and thus in the economy, which in turn is geared toward growth. Investors take advantage of this with the most broadly diversified portfolio possible.
quirion's global ETF portfolio is diversified according to scientific criteria. Short-term setbacks can happen, but: the strategy is geared toward long-term wealth building. Forecasts play no part. With a portfolio like this, the right time to invest is "always now."
