Investing in Austria

Investing means putting money to work so that it can increase in value over the long term or generate ongoing returns. Unlike a safe reserve, investments can also suffer substantial losses. Before getting started, you should have an emergency reserve that is freely available. Money for rent, everyday expenses or purchases planned for the near future normally does not belong in highly volatile investments. Shares are ownership interests in companies, bonds are debt securities, and funds bundle many investments. Exchange-traded funds are often referred to by the abbreviation ETF. For securities, an account is usually opened with a bank or investment services provider. Purchases, sales, returns and costs appear in the account records. Diversification means not making your money dependent on a single company, market or point in time. It can limit losses, but cannot rule them out. Return and risk are connected. Higher potential gains usually come with greater volatility, a longer commitment or a higher risk of loss. Depending on the product, investing involves costs for buying, selling, management, the securities account or advice. In Austria, taxes on certain capital income are also practically significant, with the handling depending on the product and provider. A good investment plan describes the objective, time period, tolerable losses and regular contributions. It should be simple enough that its functioning remains understandable even during unsettled market phases.