Since more than 20 years I invest my money in various ways:
- Public and corporate Bonds
- Fixed term deposit
- Shares & Fonds
- Options & Derivates
- Direct investment in companies
Looking back to my finacial track-record is quite sobering. Overall the performance have been 3%. But the resultats of each investment vary a lot. To my suprise the „100%-safe-bets“ and the „very-risky-bets“ had the best performance. All other investments „in the middle of the road“ have been dissapointing / sometimes devastating.
My best investments „100%-safe-bets“ (probability-of-default< 2%)
- I have bought in 1999 German Bonds with a high yield and held it until termination, 7 years later (8% p.a.)
- I have bould an appartment in 2011 in Frankfurt and since than the prices have been rising 7% p.a.
My best investments „very-risky-bets“(probability-of-default>40%)
- I borrowed several times money to a friend. Every time I was convinced, that I never see the money back. Every time I was wrong. No earnt interests, but a good feeling. What is money for, if not to help a friend?
- I invested in 3 companies that my wife or I have started. Noone would have done this (very risky). The return is a multiple of my initial investment.
- Nassim Taleb descibe this invetment-strategy as barbell-strategy: Don’t go for medium risk-investments. Try the super-safe-investment, that gain value, when the world is collapsing and invest in serveral very risky ventures that could have a hugh upside (black-swans)
- I definitly learnt the lession the hard way. My next investment will be more in a barbell-style.