The pandemic led to a 9% drop in consumer spending in Luxembourg in 2020, leading to savings of €1.2bn. For some, it will be the first time they have excess savings to invest. 

As banks, insurance firms and funds scramble for this money, Gaelle Haag, co-founder of investment education and advisory outfit Startalers shares tips for first-time investors.

But before considering investing, what are the first questions they need to ask themselves? Is it really excess savings? What kind of investor type am I? What’s my strategy?)

The frenzy around cryptos, especially during covid when people had a lot of spare time to invest in cryptos.

“The very first question you should ask is are you ready to invest from a financial perspective […] and a knowledge perspective?” Haag explains.

Crypto frenzy

She breaks down the definition of “excess cash”, makes a strong case for self-directed investing over keeping your hard-earned cash in the bank or buying traditional retail products and examines the “crypto frenzy”.

She says: “That is something that kept me awake at night in past months, seeing how many people got into cryptos as their first investment ever and how they were so certain it would go up. I had many friends who never invested before with whom we had endless conversations about how risky financial markets are and they would never invest, all of a sudden they’re crypto traders and they were looking at their crypto applications every second hour.”

Haag also examines how self-directed investing has become a new way to bring change, as seen this year with the Gamestop case.

“It starts to be proof that small investors and even small amounts can make a difference if we can rally enough,” says Haag.