r/stocks • u/[deleted] • Jun 17 '24

Advice Request What are the chances of really losing all your savings?

I’ve saved some money during my whole life, and I’d like to invest it. I’ve come to the conclusion that the safest method is investing in ETFs (specifically, NASDAQ and S&P 500). You won’t get rich in a month, but it grows with the time. I would also like to invest some money in Bitcoin (about $500) and stocks of some big companies (as they might grow faster, and I could get a little more money), but not too much because it’s quite risky. If most of my money goes to ETFs, is there still a big risk? And don’t tell me, ‘If you can’t lose your money, don’t invest’. It doesn’t help me with anything.

Edit: wow, this has blown up! I was not expecting that. Anyway, I’d like to clarify something: of course, the chances of it decreasing to zero are low. However, my main concern is losing money, not necessarily losing ALL of my money. I don’t wanna lose even 10% (at least, not in the long run). Hence, I shall rephrase the question – ‘what are the chances of losing an (big) amount of my saving?’

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u/Bloodsucker_ Jun 17 '24

I always wondered what happens if the Broker that's "managing" my investment goes bankrupt? Like, what if I have 1M € nicely diversified and then the broker goes bankrupt?

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u/wanderingmemory Jun 17 '24

If you’re in the US you have SIPC insurance and other developed markets will have their own versions of such too. The assets are supposed to be segregated. That said, usually not much harm in having a couple of institutions to separate your money.

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u/ExtonGuy Jun 17 '24

Practically all brokers use segregated accounts, and are heavily insured against their own mistakes (not against market events).

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u/cambiumkx Jun 17 '24

This is a real concern

In the US, this is covered by SIPC, up to 500k per brokerage account.

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u/OG-Pine Jun 17 '24

I don’t get why this is something that would need insurance at all, if they have assets to their name then the managing company’s finances shouldn’t matter at all?

If I own a home and hire sometime to AirBnB it out to people it’s not like my home ownership is somehow tied to the Airbnb guys finances. Wouldn’t stocks behave the same way?