Among the upward cycles that usually repeat themselves, December is the most favorable month to take positions in Spanish equities. It is the period of the year where the famous and expected Christmas rally, as well as makeup operations by investment funds, both national and outside our borders. In the last 20 years the balance has been clearly positive for bullish positions in the stock market and in very few years the balance has been negative.
All these are more than enough reasons to open positions to dismiss the year and if things have gone wrong in recent months there will be an opportunity to correct these errors in the investments we have made. Although after the latest rises in the financial markets there are fears that the corrections may lead precisely to the month of December. Although at the moment it is not the most likely scenario that we must contemplate from any kind of investment strategies.
Under this general context, there are a series of variables that explain this fact that is repeated year after year and that give the guideline to a good part of the small and medium investors to return to the equity markets, in the event that they have left. their positions for any reason. In either case, it is a period in which traditionally the buying pressure it is imposed with particular clarity on the salesperson. Now we just have to wait if this same trend will happen this year or if, on the contrary, it has some other surprise in store for retail investors. We will have to wait very little time to know the final solution to this stock market approach.
Diversify investments
If you do not want negative surprises in the remainder of the year, the best alternative you have at the moment is to expand your investments with other financial products. For example, investment funds, fixed-term bank deposits or others with similar characteristics. With the main objective of not having the savings of your whole life in the same basket and in this way you can lose a very important part of your invested capital. To the point that you can lean towards alternative investments, although in this case with more modest monetary contributions. So that in this way you can preserve the money above other technical considerations.
Take advantage of the Christmas rally
The last month of the year can be used for you to take positions in the equity markets in a punctual and occasional way. That is to say, during a very short period of permanence to receive the benefits of this bullish pull in the stock market. To then return to liquidity positions and wait for better times to return to make the savings profitable. Even with the possibility of collecting the dividend that can reach a profitability very close to 5%. Not in vain, this type of rally usually develops almost every year and with very few exceptions in its application.
On the other hand, you cannot forget that this is a very short-term investment where it is very important to adjust the price of entry into the stock market in order to speed up capital gains. As is the fact that it is a movement that affects all national equity values. Although it is the most aggressive stocks that pick up the hikes with greater intensity than the rest. In any case, the movement out of the financial markets is also very relevant. Because it is about very fast operations and above all agile in all investment strategies. With an average profitability in the last ten years around 10%, one of the highest in all periods of the year.
Opt for more aggressive strategies
Another of the other options that you have on hand at the moment is based on buying the most aggressive securities on the national stock market. Where profitability can be improved compared to another class of listed securities as a goal to have the year with a smile on your lips. In either case, these must be very fast operations that require greater attention to what can happen in the equity markets. In stock market sectors, such as coming from new technologies, cyclicals, financial groups and in general all industrials. Where there can be a greater divergence in the conformation of prices.
Alternative investments
Facing the profile of the more aggressive small and medium investors, positions can be opened in financial assets of these characteristics. Because these investment proposals can reap the benefits in a very short space of time. Through assets, such as materials or precious metals and where in some cases they present an upward trend that can be very interesting to take positions at this time. In this case, as a complement to the investment by the users.
It is an option with greater risk in the positions, but with the advantage that the profitability can be much higher than in the more conservative or defensive proposals. To the point that you can be in a position to reach levels of up to 10% in a very few trading days, as has happened in previous years. On the other hand, it must be emphasized that this type of investment can be carried out through investment funds or exchange-traded funds. The latter are a product that is a mix between the purchase and sale of shares on the stock market and investment funds. And that they invest their portfolios in this class of alternative financial assets. With the benefit of generating commissions that are more competitive in terms of user payments.
Good precedents for December
BME achieved a 77,09% market share in Spanish securities trading in November. The average range was 4,88 basis points at the first price level (17,7% better than the next trading venue) and 6,61 basis points, with a depth of 25.000 euros in the order book (43,9 , XNUMX% better), according to the independent LiquidMetrix report. These figures include the trading carried out in the trading venues, both in the transparent order book (LIT), including auctions, and non-transparent trading (dark) made out of the book.
While on the other hand, bargaining in Fixed rent amounted to 24.965 million euros in November. This figure represents an increase of 0,9% compared to the volume registered the previous month. The total contracting accumulated in the year reached 319.340 million euros, which implies a growth of 67% in relation to the first eleven months of 2018. Where the volume admitted to trading in the month was 20.052 million euros, which represent a drop of 22% compared to October. The accumulated growth in new issues until November was 4% compared to the same period of the previous year. The outstanding balance grew by 1,9% in the year, to 1,6 trillion euros.
Financial derivatives grow 3%
The market Financial derivatives Trading increased in the first eleven months of the year by 2,9% compared to the same period of the previous year. Volume in Stock Futures increased 48,1%; in Futures on Stock Dividends, 96,1%, and in the IBEX 35 Impacto Dividendo Futures, 111,0%. Compared to the month of November of the previous year, trading in Futures and Stock Options increased 30,2% and 6,8%, respectively. The open position increased 7,4% in the month.
This is a precedent that can be very beneficial for the end of December to be a good month for the interests of small and medium investors. Regardless of whether or not the long-awaited rally of the Christmas holidays takes place. But that starts with a certain optimism on the part of financial intermediaries. And that if imposed could lead to a revaluation in the valuation of share prices in a range that ranges between 5% and 15% more or less. But on which will depend the final result of operations in the equity markets in this difficult year for everyone.
Because in fact, there is a real possibility of sharing surprises among users so that in this way you are in a position to boost your investments in the last and decisive stretch of the year. And in any case, it will serve as a starting point for the next exercise that will be even more complicated than this one. At the end of the day it is the bag where you are playing the money. Through assets, such as commodities or precious metals and where in some cases they present an upward trend that can be very interesting to take positions at this time.