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The three most common reasons for leaving an investment early

Early termination of a long-term investment is not recommended, but sometimes there is no need for another procedure.

There are several reasons to cancel or partially withdraw money from investments. From simple panic, where the investor reacts briefly to developments in the capital markets exactly according to the rhetoric of general media, to incorrect instructions at the level of user error.

We will introduce you to the three most common reasons that lead to the sale of an investment. The background to the cancellation of investment positions is often trivial and linked to the financial flows of each investor. It is not always possible to satisfactorily balance personal and family income and expenses so that it is not carried away by some part of the investment portfolio, which serves to accumulate funds for a happy old age.

Zero financial reserve

Sometimes there will be some unfavorable major releases in a short time and your otherwise sufficient financial reserve will take over. Your car breaks down several times in a row, or several household appliances have broken down, which must be replaced as soon as possible.

As soon as the balance in the savings account reaches zero and other necessary expenses need to be paid, the investments come first. Unlike supplementary pension insurance or life insurance, investments in open-end mutual funds can be canceled quickly. You have funds in your personal account within one week.

Missing start-up capital

In contrast to the lack of a financial reserve, capital is often a necessary step for starting a business. If you decide to start a business, you will need enough funds to start. However, it is not always appropriate to dissolve the existing savings into the start-up of the company, which you will lack to balance expenses in the event of a loss of income.

Extravagance

The last – simple – reason that can lead to the cancellation of the investment portfolio is extravagance. All you need to do is think that it doesn’t make sense to keep money in your investments if you need a new mobile phone or suit. A separate chapter is the fulfillment of foolish wishes within the framework of partnerships. Literally silly ideas include a romantic holiday for two on an exotic island.

Financial availability

The most available funds can be obtained by selling unit certificates. Investment companies will repurchase them under open-end mutual funds as soon as they receive your instruction. The money will appear in your bank account within one week. Shares are another quickly liquid financial product. Here, however, the demand for the security must be on the market. If not, you will have to go down with the price. Often well below the original acquisition value.

If you need your money, consider whether you really need it. You can postpone your business or better schedule your financing so that you do not lose investment income unnecessarily. The chapter itself is extravagance, which brings a false feeling of satisfaction with a very rapid fading.