If you are of a conservative profile, it will be better in 2019 that you direct your investments towards financial assets that are safer than those included in the equity markets. The predictions of the different financial analysts are not very flattering for the expectations of small and medium investors. Once it has been verified how the bags have finished during the past financial year, with declines of more than 10% and in some cases even more intensely. It is a bad sign for the financial markets these days of the new year.
One of the most relevant reasons to explain this change in orientation in the equity markets is due to the real risks of a new economic recession. At least the financial markets are discounting such a possibility. Not surprisingly, stocks tend to anticipate future scenarios, as has happened throughout history and especially in recent decades. They act more quickly in the diagnosis and also with the mitigation that it is seldom wrong.
Given this scenario that occurs for equities in general, you will have no choice but to eliminate from your investment portfolio a series of financial products that will incorporate a added risk. With the real possibility that you could lose a good part of your savings from now on. We are not referring to the bag itself, but rather to a series of products that can be more toxic to your personal interests and that we will expose you below.
Products with risk: warrants
Investment funds with high management commissions, bonds convertible into shares or mortgages under currencies are some of the least recommended financial products for this new trading year. But if there is one that can give you more than one dislike now those are none other than the warrants. It is a very sophisticated product that is characterized by its high volatility and is the closest thing there is at the moment to a purchase option. Not in vain, it offers you the right to a fixed price for a specific period that is reflected in its expiration.
But if warrants are characterized by something, it is by high leverage, above the usual. To the point that this important factor can make you earn a lot of money, but for the same reason, leave you many euros along the way. Beyond other considerations of a technical nature that are more reserved for the investors with higher learning in this class of financial products. It is therefore a risk to which you should expose yourself and therefore it is not highly recommended that you invest your available capital this year in a product as aggressive as warrant. You have a lot to lose by opening positions in this investment model.
Products linked to currencies
This year will not be the most conducive possible for you to choose to invest in investment models based on other currencies other than the euro. Especially in products as specific as investment funds since the risk in operations will increase proportionally, but above all in a way that is not necessary. You cannot forget that the currency sector is one of the more volatile in these moments and can lead you to very compromising situations. More than you think from the beginning.
One of the markets that will be most altered in this new year is that of currencies and this will allow you to achieve excellent capital gains, but also that you have losses that are very difficult to assume. If you are not an investor who is used to operating with this class of financial assets, it will be much better to give up the attempt. Not surprisingly, it is your own money that you are gambling and in this sense, experiments in financial markets that are more unknown to you are not worth it. The effects of these operations can be very counterproductive from all points of view. If you can, it is another financial product to avoid from now on.
Contracts for difference
Experts insist that it is necessary to increase financial education in our country, if you want to heed this prudent recommendation, nothing better than to forget about the popular until a few years ago CFD. They are contracts for difference and are governed by the same or similar strategy of the previous investment models. In addition, they are under the watchful eye of financial supervisors due to the high risk involved in their operations. You have not operated with this product or try it because you will surely regret it.
Contracts for difference allow you to benefit from fluctuations in the price of the underlying products without having to own them. But they are very complex to operate and in this aspect resides its most important disadvantage as for it to be hired by an investment profile like yours. There's a lot financial digital platforms that market this product for investment and therefore you will have many more temptations to open positions in any of its formats. Do not forget that it can have a lethal effect on your interests in a year as complex for investments as this is going to be.
The virtual currency sector
If there is a product where you can leave absolutely everything in 2019, it is doubtless this innovative. Not surprisingly, there are already many financial analysts who warn that a financial bubble may burst in the coming months. Therefore, you should not tempt your luck and get carried away by the high profitability that can be obtained on these products in a very short space of time. In this case, the falls are not 10% or 20% as can happen in the equity markets. If not, on the contrary, we talk about depreciation greater than 1.000%.
Within this general scenario, you cannot forget from these moments that the cryptocurrencies, it is not an investment in the classical sense of the term. But a series of operations with a marked speculative component and with the greatest possible risks within the always complicated world of money. It is, on the other hand, an excessively complex investment model that is not intended for all profiles by users and with very specific tools provided by digital financial platforms.
Derived by no means
In this group we cannot forget the derivative products that we will have to leave for a better occasion and once the doubts that arise for investment are cleared from these precise moments. In this sense, you should know that this class of financial products allow you to invest a minimum part of the cash of a transaction, maintaining an exposure on the entirety of the contract value. In other words, they are more flexible in their structure, although in exchange for assuming many more risks in their positions.
On the other hand, with derivatives there is no doubt that you will be able to benefit from downtrends of the market, opening short positions. This is a subtle difference that these products have compared to conventional operations. Where the short sale is complicated and has much more expansive financing costs. It is perhaps one of the few advantages you have in this special kind of investment. Although it is not the time to open positions, much less in the current scenario presented by the economy in general.
Raw Materials
Of all the financial markets, this may be the one that offers you the biggest negative surprise of all. Many of these financial assets are in a situation of depreciation of their prices and in the coming months this trend may be more pronounced. It is also not a good time to start operations in these products since at the end of the day you have much more to lose than to gain. Beyond other kinds of technical considerations and even from the point of view of its fundamentals.
Encompassing in a joint way and en a single product all the main advantages that shares, warrants and futures offer together. This is one of the main characteristics of products derived from raw materials. Where it is much more complicated that the limited risk option allows you to protect your capital against any unforeseen movement in the markets of these important financial assets. It is not surprising, then, that small and medium investors do not opt for this kind of alternative operations and clear risks in their purchase orders.
As you can see, you already have a series of products in which you should not position yourself if you do not want to have some other dislike from now on. Especially if its evolution in the markets is not expected when formalizing the movements with the aim of making your available capital profitable. You'd better direct them to other financial assets that give you more confidence.