»No investment without risk«

Mrs. Jafari, while traditional forms of saving are becoming less important, investments are playing an increasingly important role in building wealth. What is driving this shift in mindset?

 The shift in mindset comes down to one simple realization: doing nothing also involves risk today. For a long time, many people believed that financial security meant leaving their money untouched in a bank account. But in a world shaped by inflation and growing uncertainty, this approach is often no longer sufficient to preserve wealth over the long term.

More people are taking a closer look at their finances and recognizing that building wealth is not a product you simply buy, but an ongoing process that requires active involvement. It is about making informed decisions, weighing opportunities against risks, and taking a deliberate approach to managing your wealth.

Financial literacy will be one of the most important skills in the years ahead. However, the biggest change in recent years has not been economic in nature. More and more people are realizing that responsibility for their own wealth cannot simply be handed over to someone else. Wealth is rarely created by chance.

 The collapse of Deutsche Telekom’s stock more than 25 years ago remains a defining event for many German investors. What went wrong at the time? How can investors protect themselves against such losses?

The Telekom stock did not destroy people’s wealth but a lack of risk awareness and market understanding did. Many investors concentrated their trust in a single investment and relied more heavily on public promises and widespread euphoria than on their own analysis and a sound understanding of the market.

In doing so, they neglected one of the most important principles of wealth creation: No investment comes without risk.

The real lesson from that period is therefore not to avoid certain stocks or markets. It is this: never blindly follow other people’s opinions and never base financial decisions on a single scenario. People rarely lose money in the stock market because they have too little information. They lose money because they believe they can assess the risks better this time than everyone else. Similar developments can occur at any time. New technologies, social trends and economic upheavals regularly create periods of intense euphoria. But over the long term, markets tend to punish those who ignore risks or act on emotion.

Anyone seeking to build wealth sustainably needs a system that continues to work even when the future unfolds differently than expected. Successful investors are not those who are always right. They are those who can weather crises and unexpected developments without putting their wealth at lasting risk.

How do geopolitical crises affect investment decisions? How can investors distinguish between rational and emotional responses – and determine when it is better to wait rather than act?

 Wars, political conflicts and trade disputes can cause significant short-term market volatility. Nevertheless, it is not the crisis itself that determines long-term investment results, but how investors respond to it.

Crises rarely destroy wealth – emotional decisions do.

Fear creates an urge to act immediately and that is often where the greatest risk lies. A rational decision is not based on headlines, but on a clear plan. Investors who have already defined in advance the conditions under which they will act – and when they will deliberately refrain from acting – generally make much better decisions.

Patience is often underestimated in financial markets. The most successful investors are those who can distinguish between meaningful changes and short-term noise.

The key question, therefore, is not: »What is happening right now?« but rather: »Is this event actually changing the underlying facts – or merely my emotions?«

 From stocks and ETFs to cryptocurrencies and precious metals, investors have a wide range of options. What criteria should they use to determine which asset classes are right for them?

 Many investors initially ask themselves which asset class is the best. But that is not the right starting point. Just as entrepreneurs define their goals before choosing the right tools to achieve them, investors should establish their financial objectives before considering individual investments.

Each asset class serves a different purpose. Stocks offer long-term growth potential, ETFs provide broad market exposure, precious metals can provide stability during periods of uncertainty, while cryptocurrencies represent innovation but also come with greater volatility.

A 30-year-old entrepreneur looking to build wealth over the next several decades will make different decisions from someone approaching retirement who is primarily focused on preserving capital.

Both approaches can be appropriate as long as the strategy fits the individual’s circumstances.There is no perfect asset class. There are only asset classes that are more or less suited to an individual’s goals. Anyone looking to invest successfully over the long term should therefore spend more time developing a clear wealth strategy.

Stock-market sayings such as »Don’t put all your eggs in one basket« are still widely quoted today. Which of these principles remain relevant, and which do you consider outdated?

 Many stock-market sayings have survived for decades because they contain a grain of truth. That also applies to the principle of diversification: spreading investments remains an important part of sound wealth management because it reduces dependence on individual assets and helps limit risk.

The problem arises when a market saying becomes an unquestioned rule of thumb. What has changed is the speed at which markets, technologies and economic conditions evolve. Relying exclusively on old principles can be dangerous.

Diversification is no substitute for active risk management. An investor can spread their wealth across numerous positions and still suffer significant losses if they do not understand the risks behind those investments.

I am also increasingly critical of the idea that you can invest your money once and then simply leave it untouched for decades. Long-term thinking does not mean ignoring developments.

Timeless principles such as discipline, risk awareness and a clear strategy have lost none of their relevance – quite the opposite. The decisive question is therefore not whether a market saying is old or new. What matters is whether it helps investors make better decisions.

Which developments will have the greatest impact on wealth management in the years ahead? And what will be the key challenges for investors seeking to build wealth in an increasingly complex environment?

 The biggest challenge will not be access to information. Information is already available in almost unlimited quantities. The real challenge will be turning this abundance of information into sound decisions. Artificial intelligence, social media and the constant flow of news expose investors to countless opinions and create the impression that they need to act or react at all times. That is one of the greatest risks I see.

The more complex the world becomes, the more important clear processes, structured decision-making and professional risk management will be. The key will be developing the ability to assess information correctly and avoid emotional decisions. Do not invest in hopes, opinions or headlines. Invest in knowledge, structure and a clear decision-making process.

Long-term wealth creation is the result of many sound decisions made consistently over the years. Those who learn to take responsibility for these decisions create the best conditions not only to build wealth, but also to preserve it over time. Wealth is not created by knowing what the future holds. It is created by being prepared for different future scenarios.