Understanding the Basics of Investing

 

Investing is more than growing your money—it’s about taking control of your financial future. Whether you're planning your retirement, funding a personal project, or just boosting your savings, understanding how investing works is a crucial first step.

 

This guide supports you in taking your first steps with confidence, helping you choose solutions that match your goals and investor profile.

Classic investment options remain a solid foundation for any investor:

• An equity is a security representing ownership in a company. By purchasing an equity, you become a shareholder and thus a partial owner of the company. Equities grant rights such as receiving a share of the company’s annual profits called dividends.
• A bond is a debt instrument issued by an entity, representing a loan made by the investor. The bondholder usually receives periodic interest payments called “coupons.”
• An investment fund, also known as a collective investment scheme, is designed to hold and manage a portfolio of financial or non-financial assets on behalf of multiple investors, according to a predefined policy and objective. It is managed by a professional financial institution, called an asset management company.
• ETFs (Exchange-Traded Funds) are investment funds traded on stock exchanges. They aim to closely track the performance of an underlying asset, usually an index, and often focus on a specific sector, geographic area, or asset class (e.g., commodities).

These instruments are ideal to build a balanced portfolio—provided you understand how they work.

For more experienced investors or those seeking diversification:

• Private equity: invest in unlisted, often innovative companies. Offers high return potential but involves significant risk and limited liquidity.
• Hedge funds: allows you to access sophisticated and complex strategies, typically reserved for informed investors, aiming for absolute performance but with higher risk.

An investment fund pools the savings of multiple investors and entrusts them to professionals. These experts select assets based on a defined strategy, offering:

• immediate diversification;
• expert management;
• easy access to various markets.

It’s an ideal solution for investors who want to delegate management while maintaining control over their goals.

Today, investing also means taking action. More and more savers want their money to support causes they care about. This is where ESG criteria come in:

• Environment (E): Measures the impact of a company’s activities on the environment and vice versa. Examples include resource management, carbon emissions, energy transition, recycling, and pollution.
• Social (S): Measures the impact of a company’s activities on stakeholders-working conditions, human rights, gender equality, employee well-being, etc.
• Governance (G): Measures how a company is governed, managed, and controlled-board transparency, anti-corruption, risk management, etc.

These allow you to invest in committed companies while seeking performance:

• Thematic future funds: technology, healthcare, energy transition…
• SRI funds: combining financial performance with positive impact.
• Heritage funds: for stable long-term growth.
• Geographic funds: capturing regional opportunities (Europe, Asia, U.S.…)

All funds in the BGL BNP Paribas selection are classified under SFDR regulation:

• Article 8: integrating environmental and/or social criteria.
• Article 9: aiming for a sustainable investment objective.

Investing helps you achieve multiple goals:

• grow your capital: earn higher returns than traditional savings accounts;
• prepare for the future: retirement, education, life projects;
• protect against inflation: preserve your savings’ purchasing power.

All investments carry some risk. Markets fluctuate, and poor decisions can affect your capital. To limit risks:

• educate yourself;
• diversify your investments;
• define a strategy suited to your profile.

Before investing, it’s essential to complete your investor profile, in accordance with MiFID regulations. This helps you understand your choices and receive personalized support.