One of the worst situations that can arise is to be in losses in your investment portfolio. Not only will it be an unwanted scenario, but it may cause you the odd headache. Because you will not be in a position to sell your shares and with the added risk that your shares may continue to depreciate in the financial markets. To the point that it is something that you have experienced more than once in your history as a small and medium investor.
All your strategies must be aimed at avoiding this unpleasant situation. But in most cases you will have no choice but to assume them as a result of the inertia of the financial markets themselves. It is something that will be out of the control of your performances. Where you will only have more than two solutions. Or sell the shares with the consequent handicaps. Or, on the contrary, wait for things to go better for you and the prices of the shares rebound until they reach the purchase price of the same.
Of all of them, from now on you will have a series of investment strategies that will help you with the possible losses that you may generate in your operations in equities. They are easy to apply and will not require special knowledge to carry them out from now on. They are of diverse nature so that you can import them depending on the profile you present as an investor: aggressive, moderate or defensive. In any case, it will be a tool that will give you greater efficiency in your actions. And probably more confidence in your performances in the world of money.
Can you avoid losses on the stock market?
Of course, it will be very difficult for you to avoid the appearance of this scenario. Not to say practically impossible. Not surprisingly, the stock market is not a science and anything can happen, even being able to lose more euros than expected in the stock operations that you execute from now on. But what yes can get is to limit them. So that the balance of your checking account does not generate more than one displeasure in the coming years. To do this, you will only have to follow some of the tips that we are going to expose you.
To achieve these long-awaited objectives, you will not only have to carry out very clear and well-defined guidelines for actions. But it will also be necessary for you to change some of the habits you have in your relationships with the equity markets. With a little luck and some discipline you will not have excessive problems From now on, the current account balance does not suffer excessively. To the point that you can lose a very important part of your personal assets.
First key: diversify
It will be a basic rule to protect your savings from the undesirable scenarios that equities can bring you. This investment strategy can be used by not investing your savings in just value. But in several and if possible they come from various financial assets. Fixed, variable, alternative income and the odd new financial market is the best recipe to shape your portfolio from these precise moments.
Even through a financial product that collects these contributions in investments. Investment funds are precisely one of the proposals that best capture this unique trend. Because in effect, your portfolios can be made up of various financial assets. From corporate bonds to the purchase of shares in the most original financial markets that you can find right now. With very satisfactory results for people who use these strategies.
Second key: active management
There is no doubt that this action will help you better carry your investments. Especially in the most unfavorable scenarios for financial markets. For a very special reason and that is to know adapt movements to all possible scenarios. From the most beneficial for your personal interests to what is generated in periods of economic recession. It also has the important advantage that the managers themselves will be in charge of carrying out these changes depending on the situations that arise at all times.
The big problem in carrying it out is that very few banking or financial products provide this feature. And again it is the investment funds who offer it to you in all its intensity. Under active management of your savings and that contrasts with passive investment formats. Which are the ones that always keep the same composition. Whatever happens and even if serious problems occur in some of the selected financial markets. It's a substantial difference that can help you get out of trouble. Especially in the bearish periods of the equities.
Third key: combine several
One of the most important keys so that your losses are not too large is to distribute your savings in various financial products. Coming from both fixed and variable income or even choosing the odd alternative market. Where those of raw materials, precious metals or currencies can be the most suggestive to combine your investment from now on. The results, as you can see, are spectacular as losses will be reduced dramatically. More effectively than you can imagine from the beginning.
In this way, you will be in a position to combine time deposits, bank notes, purchase and sale of shares, investment or listed funds and even high-income checking accounts. As a consequence of this very useful strategy, you will also be able to opt for much more sophisticated products that can bring you greater profitability to your financial contributions. The advantage you have is that you will be in the best of conditions to combine any product or financial asset.
Fourth key: get out of the borders
To minimize the losses that you can generate from now on, you can also go to other international markets in equities. Not surprisingly, there are always some that behave better than others and you can take advantage of this inertia in the trend of their prices. It will give you a better margin to avoid the most unfavorable scenarios for the interests of your invested capital. Although you will have no choice but to face more expansive commissions that will cost you operations in the equity markets outside our borders.
Of course it will help you seize every opportunity of business that are presented. At any time and in various settings. There are no limits to your operations since you will only be the one who imposes them from your own approaches to relate to the complicated world of money. From the equities of the United States to those of the old continent, they are to forget about the Asian or even Latin stock markets. They involve a greater risk, but at the same time the reward will be higher. Always with the aim of limiting the losses of your income statement.
Fifth key: limit contributions
Another very practical way to protect your interests as a small and medium investor. Because it will allow you reduce handicaps in a radical way. Not surprisingly, the money at stake will be less and therefore you will run less risks than in other more expansive scenarios from the monetary point of view. Because in effect, you do not need to invest all the available capital, but with a part of it, depending on your economic needs. Even with very modest contributions to avoid taking excessive risks in your movements in the stock market.
In addition, it will provide you with the fact that you can have greater liquidity for when the best opportunities arise in any of the financial markets. Something that is not possible, if on the contrary, you invest all your capital at one time. If you allocate between 20% and 60% of your savings, it will be more than enough to satisfy your investment wishes. Leaving a consignment of them for new operations in the coming months.
Sixth key: no to the sophisticated ones
Finally, you cannot forget that absent yourself from taking positions in the most aggressive products will help you manage your capital. Many of them involve excessive risks and especially if you do not have sufficient financial knowledge to operate with these proposals. Where a bad evolution of them can cause you to lose a lot of euros by the way. Up to levels that can be very dangerous for your interests. Where it is even possible that you leave a good part of the capital in the middle.
Warrants, credit sales, derivatives and some investment funds are some of these products where you can lose more money than necessary. To the point that you consider that it is not worth investing in these aggressive models in terms of their mechanism. Nor can you forget the products that are more similar to the toxic and that they have left a line of victims along the way. With judicial processes involved. It is something you should not do if your main desire is to protect your savings at all costs. In none of them, to avoid having a bad time in your personal situation.