One of the priority objectives of any small and medium investor is to prevent losses from being installed in their investment portfolio. Or to those that are minimized in the face of the most adverse scenarios in the equity markets. In a very practical way and that can give you more than one idea to carry out these longed-for wishes. Always from a point of view that is aimed at investors who they have less experience in the financial markets.
From this generic approach, what it is at the end of the day is that you can respond effectively to negative movements in the equity markets. Not surprisingly, this is one of the most common mistakes that are usually committed by a good part of small and medium investors. But from now on, this incident can be corrected so that you can better profit from the operations you are going to carry out on the stock market.
While on the other, you cannot forget that this is a very special strategy for the balance of your savings account to be much more stable than until now. Like their balsamic effects on the securities you select in your next investment portfolio. Whatever the investment strategy you are going to make from now on. So that you can set goals in your investments in the stock market. Beyond other considerations of a technical nature and maybe even from the point of view of its fundamentals.
How to avoid losses on the stock market?
The first recipe to achieve these objectives in the equity markets lies in the fact that you have to know very well the stocks in which you are going to take positions. It does not have to be in any listed company, but you have to be aware of its line of business and of course its evolution in the financial markets. Like be linking with your movements in the setting your prices. So that in this way, you make many fewer mistakes in choosing your investments. The effects will be very positive during its application as you can see if you develop this investment strategy.
Know the entry price
A second tip to avoid losses in the equity markets is to choose very well purchase prices. Because the profitability of the investment will depend on them. To the point that it is a very complex system to carry it out with some success. But at the end of the day it can give you more than one joy from these moments. Especially if this operation is accompanied by an excellent sale. That is to say, with the greatest possible difference between the entry and exit levels and which will ultimately determine the result of the operations carried out in the equity markets.
Invest in bullish trends
Before investing in the stock market, you have to check the underlying trend in the financial markets. In no case, you should open positions in the bearish movements in the stock market because you have all the ballots to leave you many euros along the way. Do not forget it from now on because it will help you preserve your capital in the stock market above other considerations. In this sense, it is very useful to apply this measure in the scenarios that arise with higher volatility. Where their maximum and minimum prices are very extreme and can lead you to make the odd mistake. Carrying it out can mean much more money in your savings account balance at the end of the year. Don't forget it if you want to be positive in your relationships with the equity markets from now on.
Do not do big operations
On the other hand, a very relevant investment strategy is based on not carrying out large operations from the point of view of their monetary amount. While on the other hand, it is a factor that helps you that the possible losses are much more nuanced with respect to their intensity. In addition, you do not have to make disbursements that are beyond your possibilities and that the only thing that can bring you are problems if the instability settles in equity markets. Where perfectly you can lose 20% of the contributions generated in stock market operations.
Find highly liquid securities
Although it may surprise you, there is no doubt that this investment strategy can be very interesting to protect your positions in the equity markets. Among other reasons because you can enter and exit the financial markets at the time you want. To the point that you can adjust buy and sell prices to optimize the operation in a best possible way. So that in this way you can control the movements that you have opened in the equity markets. Not in vain, it will cost you very little to carry it out through the large capitalization securities that make up the selective index of the Spanish stock market.
Values far from supports
A little trick that always gives very satisfactory results is to buy stocks in stocks that are closer to their resistances than they are to support. That is, it is very important not to open positions very close to the support levels since if it is exceeded, the potential for falls is more than relevant. To the point that you will have no choice but to sell the shares after a few days. Therefore, you should use technical analysis to use this strategy to protect your positions in the equity markets. With a very high level of effectiveness and above the previous tips that we have mentioned in this article.
Don't buy overbought
Carrying out operations on the stock market under this investment strategy does not bring good consequences for the accounting of your movements in the equity markets. Because at the end of the day it only serves so that a few days after making the purchases you can be at capital gains levels with all that this may imply in the state of your investment portfolio. Because in effect, it is a very dangerous strategy that you can fall into if you opt for some of the values that present these characteristics. Not surprisingly, you have much more to lose than to gain. Because do not doubt that fixes will be installed in equity markets. Therefore, be very careful with this factor in the stock market because of the bearish implications it has when buying the shares.
Do not consider very short deadlines
There is no doubt that you should plan the periods of permanence in your investments in the financial equity markets. In this sense, one of the best tips at this time is to look for very fast operations that you can make profitable in a few days or even weeks. From where you can face with greater liquidity in your checking account balance. You cannot forget that for this it will be necessary to develop a much more aggressive investment strategy than up to now. Where it will prevail above all to look for values that can be very suitable for this kind of operations and that must have total availability to enter and exit at any time. That is, you need a little more capitalization in the stock values that you select from now on in your portfolio.
Diversifying it with other investments
For these strategies to be successful, there is no doubt that you will need greater diversification in investments. That is, relying on other products, both fixed and variable income. As for example, fixed-term bank deposits or investment funds based on these financial assets. From where you can protect your positions to avoid undesirable scenarios for your interests in the face of volatility in the equity markets. While on the other hand, it can provide you with greater stability in the way you approach your investments. On the contrary, it is a very important guideline to give a more defensive value to your relationships with the world of money.
Caution in summer times
In any case, in the cases of pleasure trips or simply to disconnect from the daily routine, it is best to forget for a few days how our investments evolve And this can be achieved through a double strategy that is available to all stock market users. In the first place, leaving our accounts in total liquidity, that is, to get rid of the buying positions and once they arrive from the trip, start the purchasing process. And, secondly, by means of conditional orders that will cause the buying positions to be undone at a certain price. In the months when you are on vacation, you will have to be much more cautious in the strategies that you are going to carry out from now on. With less risk that can lead you to lose money in operations.