What should I invest in? Your money has a personality too

You have DKK 10,000 you would like to invest. You open Google and type: “What should I invest in?”

A perfectly reasonable question. You would like your money to grow, preferably without having to complete a master's degree in finance first.

You quickly find articles about popular stocks, promising sectors and ETFs that apparently belong in every sensible portfolio.

But something is missing from all those suggestions.

You.

What if you want to invest in technology but would rather avoid the arms industry? Or you want a broadly diversified investment, only to discover that most of your money still ends up in US companies?

This is where the question gets interesting.

What should you invest in? It depends on more than you might think

Equities, ETFs, investment funds and bonds are among the options you can research when investing your money.

A share gives you an ownership stake in a company. An ETF is an exchange-traded fund that can hold many different investments. Bonds are typically loans to governments or companies, for example.

Which type of investment is relevant to research depends on factors such as your finances, time horizon and risk tolerance.

Will you need the money for a home in two years? That is a very different situation from investing for retirement in 30 years.

And if you have expensive debt or no financial buffer, it may make sense to prioritise those matters before investing.

Once the basic financial considerations are in place, another question arises:

What would you actually like your money to be invested in?

You probably have more investment criteria than you realise

Imagine choosing a new car.

You would probably not just ask the internet which car is best and buy the first one on the list.

You would consider price, size, fuel, comfort and perhaps even colour. Some people want seven seats. Others just want to park without holding their breath.

You can approach investing with the same curiosity.

For example, you can examine:

• Risk: What size of fluctuations can you handle financially and emotionally?

• Geography: Do you want global investments or greater exposure to particular countries?

• Sectors: Are there sectors you want to invest in or avoid?

• Diversification: Do you want to own a few companies or spread investments more broadly?

• Dividends: Do you prefer investments that pay dividends or those where returns stay invested?

• Costs: How much are you willing to pay to hold a fund or ETF?

You do not need a strong view on everything.

But the better you understand your priorities, the easier it becomes to research the differences between investments.

Which equities should I research if my views matter too?

Imagine two people who each have DKK 10,000 to invest.

One is interested in technology and accepts large price fluctuations. The other prioritises broad diversification and low costs and would rather avoid particular sectors.

They may research some of the same investments. But their criteria for assessing them differ.

That is precisely the point.

You may have views on climate, technology, weapons, particular countries or companies' activities. You can also decide that these matters should not determine your investments.

What matters is understanding your priorities and examining whether investments' actual characteristics align with them.

A fund with a green name, for example, is not automatically free of companies you personally want to avoid. That requires examining its holdings and investment principles.

How to develop your own investment strategy

You can begin with five questions:

1. Why am I investing? Is the goal retirement, long-term savings or something else?

2. When will I need the money? Your time horizon affects how much risk you can take.

3. How much risk can I accept? Consider both your financial ability to bear losses and your reaction to falling prices.

4. What do I want to own? Think about sectors, geography, diversification and any exclusions.

5. What costs do I accept? Even small ongoing costs can matter over many years.

Consider writing down your answers.

They do not have to be perfect or permanent. Your finances, interests and priorities may change.

They give you a starting point for comparing equities, ETFs and funds on more than popularity and past returns.

That is the idea behind Wizer Invest.

The platform lets you choose which investment characteristics matter to you and examine how different equities, ETFs and funds match your criteria.