InvestmentsBasics
ETFs, Individual Shares and Bonds Compared
Three building blocks, three characters: how ETFs, individual shares and bonds differ in returns, volatility, effort and cost.
Section
Investments
ETFs, bonds, property, gold, private equity
Investments covers asset classes and their characteristics: how ETFs, shares, bonds, property and gold work, what they cost, how they are taxed and which opportunities and risks they bring. For understanding, not as a recommendation.
InvestmentsBasics
Property as an Investment: Costs, Opportunities and Risks
Rental income, value growth, leverage: what a let property can deliver and which costs investors should realistically plan for in advance.
InvestmentsBasics
What Role Gold Can Play in a Portfolio
No interest, no dividend and yet in demand for centuries: why investors hold gold and which forms of investment exist.
Do the maths
Compound Interest Calculator
How contributions, return, costs and time work together, with curve and table.
Business glossary
Terms from Investments
- Advance lump sum
- A minimum taxable return applied each year to investment funds in Germany when distributions fall short of the so-called base return (Vorabpauschale). It is based on the value of the fund unit at the start of the year and 70 per cent of the base interest rate, capped at the actual increase in value during the year.
- Coupon
- The fixed interest that the issuer of a bond pays on its nominal value. The actual yield differs from it if the bond is bought above or below its nominal value.
- Depreciation for wear and tear
- Tax depreciation that spreads acquisition or production costs over the useful life of an asset (Absetzung für Abnutzung, AfA for short). For let property, it applies only to the building, not to the land.
- ETC
- Exchange-traded commodity: an exchange-traded debt security that tracks the performance of a commodity such as gold.
- Fixed-rate period
- The period for which a fixed borrowing rate has been agreed on a loan (Zinsbindung). If it ends before the loan has been fully repaid, the interest rate on the outstanding balance is renegotiated.
- Follow-up financing
- New financing of the outstanding balance of a property loan once the agreed fixed-rate period has ended (Anschlussfinanzierung).
- Gross rental yield
- The annual basic rent, excluding service charges, divided by the purchase price of a property, without incidental costs or running expenses. It serves as a quick first measure for comparing properties.
- Interest rate risk
- The risk that the price of a bond falls because the general level of interest rates rises.
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