To create a safe and balanced investment portfolio for this current year, you will have to be much more selective than up to now. The financial markets are being a lot more unstable than would be desirable and for this reason you should be more cautious in previous exercises. We are facing a year in which doubts arise as to whether we are facing a correction or something much greater in the markets. To the point of considering where the investment opportunities are.
There are several alternatives that can develop a better behavior in the financial markets and therefore generate a much more attractive interest from now on. These proposals will not only come from equity markets, but also from fixed income and even from markedly alternative models. With a final goal and that is none other than improve personal accounts when the year ends in December. Not without many problems that will arise along the way.
On the other hand, there have been excessive readjustments in valuations, after the effects of the trade war between United States and China, and this factor can become a real business opportunity. In particular, for providing much more competitive prices than until a few months ago. It is a situation that you can take advantage of from now on, although of course it will not be exempt from efforts to achieve the desired objectives in your investment strategy. Beyond a series of technical considerations in financial assets.
Best High Yield Bonds
This financial product is a favorite for face this complex year and that you may have excellent prospects for this ongoing exercise. Because it offers very good opportunities in a sector that grows at good rates and where default rates are low. Above other segments of fixed income that perish more stagnant in their possibilities to create a return to savings much less satisfactory for the interests of small and medium investors.
One of the reasons for opting for this alternative in investment is based on a factor as important as its uncorrelation with the rise in rates. Faced with an upcoming scenario of increases in the euro zone, as indicated by the forecasts by the European Central Bank (ECB). In this sense, it is desirable that we analyze very well who is the issuer of this financial product to enter the best positions in bonds. Because there are many options we have to make capital profitable from now on.
European stock exchange the best option
Within equities, the best solution is based on taking positions in equities from the old continent. For a reason that is very easy to explain and that a good part of small and medium investors will understand and that is summarized in that it is the financial market that has the most attractive valuation at the moment. On the other hand, he has not had a bull rally as intense as the one developed in the United States stock market. But on the contrary, it has shown a much more hesitant evolution in the last two years. Up to the point of closing the 2018 financial year in negative, with a depreciation close to 10%.
On the other hand, another reason for heading to this important financial market lies in the fact that it still has a lot of ground to cover and because it cannot be forgotten that it is the market where better opportunities can be found at the moment. With values with very adjusted prices and that makes them very attractive to formalize selective purchases, especially aimed at the medium and long term. Not surprisingly, they have a very high revaluation potential, with real business opportunities.
Inside the stock market, the banking sector
Within European equities, one of the most attractive sectors is undoubtedly the banking sector. Especially because it has depreciated very strongly in the past year. It cannot be forgotten that this stock market sector comes from one of the worst possible situations and in this sense it is very difficult for it to get worse in 2019. On the other hand, it is also necessary to assess in this election that the banking entities linked to loan portfolio with variable interest rates they will be some of the most benefited in the formation of their prices. Beyond other technical considerations.
On the other hand, and according to financial analysts, it is an important sector that is in consolidation, both in terms of national entities and within the European environment. To the point that they show very suggestive ratings, so much as to be receptive to develop purchases in the coming months. In some cases, with a valuation well below their real prices. With which an important benefit can be obtained in the operations carried out from now on.
Companies with healthy balance sheets
Another of the strategies that can be taken in this new stock market course is to target those stock market values that present very healthy balance sheets. Not in vain, they will be the ones best positioned are to develop a powerful uptrend. Or at least as an original system to protect our money invested in the equity markets. It is one of the best choices you can have this year, and to which it is added that they present very adjusted prices. With what they can have a reasonable evolution in the stock market and in any case better than the one they have developed in the past year.
This class of securities, on the other hand, will be the object of the interest of a large part of the investment funds to make their investment portfolios. And this corporate fact will play in favor of the interests of small and medium investors who are already positioned in these financial assets. With the possibility that they can get a annual profitability around double digits. It could be one of the great surprises that this year that has just emerged. In any case, it is an alternative that should not be missing in the preparation of your next investment portfolio.
Diversify financial assets
Another key to facing this new stock market exercise with notable success is based on diversifying investments. That is, combine fixed income with variable income as a formula for protect your money in the face of any scenario of instability in the financial markets. In any case, it is a strategy that is aimed at investors with a more conservative or defensive profile who put the safety of their savings above other market considerations. In addition, it is a very easy idea to carry out from now on.
It is materialized above all through investment funds known as mixed or intermediate. Where different financial assets are combined to achieve optimal profitability of savings, although without very high returns. On the other hand, this investment product is developed in many geographical areas, without limitations regarding the financial asset in which it is going to open positions. In this way, the investment is much more diversified and therefore it can be adapted to all the scenarios that arise from the financial markets, both for fixed and variable income. With hardly any exceptions of any kind.
Anti cyclical values
It is one of the safest and most effective strategies if the equity markets do not behave positively this year. Because indeed, do not depend on economic cycles and they are more likely to perform better when financial market conditions are more adverse. Therefore, they do not follow a defined trend, but rather are led by their own business results. They represent such relevant stock market sectors such as food, electricity companies or highways, among some of them.
Finally, it should be noted that this kind of values can do very well this year, although without expecting very violent movements in one direction or another. Because the volatility it is not exactly one of its most relevant common denominators. Beyond other series of technical considerations and also from the point of view of its fundamentals. In any case, they are values that will have to be kept vigilant on the radar to take positions at some point in this new trading year. In particular, those that are lagging behind in the conformation of their prices.
It is a strategy that should be part of the next review you make of your investment portfolio in order to preserve your positions in the equity markets. Although they are candidates to achieve a return that can be very interesting to defend your personal interests from here until the end of the year. In addition, many of these proposals distribute dividends among their shareholders, with a fixed and guaranteed interest of up to 6%.