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Where to invest small amounts

There are many opportunities to invest small amounts. We will focus on the traditional form and method of investing – in open-end mutual funds.

A small amount generally means an amount of up to one thousand crowns. There are many ways to invest such a small amount. We will focus on collective investment.

For small investors who have a limited budget, collective investment through open-end mutual funds is most suitable. In the Czech Republic, there are about two thousand funds on offer, from which you can choose. Complete beginners should proceed on the basis of the result of the investment questionnaire, which the responsible person (financial advisor, bank employee) will go through with them. Based on the investment questionnaire, they will find out what investors are like and whether they are bothered by a possible loss (or how high). An equally important indicator is their risk aversion. Only then can they proceed to select a suitable investment fund.

We invest small amounts

Investments in mutual funds can be made from as little as CZK 300 (for example, in mutual funds of Česká spořitelna). Banks and investment companies offer investment opportunities for one purchase of unit certificates in the range of 300 to 500 crowns.

How to invest?

For investments, it is advisable to create a standing order for payment in internet banking and set it up regularly every month. Longer-term investments of small amounts lead to averaging of purchase prices. The length of time you invest will ensure that you buy securities both at times when they are at their historical maximum (ie the market is thriving) and at minimums (recession, crisis).

Acceptable risk

Each mutual fund has a recommended investment horizon that you should stick to. The lower the potential for risk, the shorter the horizon.