If a few years ago they had told you that an investment fund is capable of saving you in the future, you would surely have called us crazy. However, today it is a reality that those who worry about saving will have it easier tomorrow than those who do not.
And for that reason, today we want to deal with aspects as important as which are the best investment funds, what you need to know to choose a successful investment fund, or how to compare them to choose the one that best suits you.
What is an investment fund?
When you are earning money, to a greater or lesser extent, you feel calm because you know that you are going to make ends meet and that you have a certain solvency to "live on." The problem is that work, like health and other aspects, is not permanent, and overnight you may find that you are left without a job, or you do not have money to make ends meet. That is why so much emphasis is placed on learning to save to have an economic cushion while getting out of these "crises."
In this sense, the investment fund is something similar. It is a way of saving where a group of people make contributions with the aim of getting something in return. In other words, that the savings they have give them a return in the future that justifies having invested that money in stocks, fixed income securities, derivatives, etc.
The Investment funds are managed by managers or depository entities, and they are in charge not only of managing the investment made by those people or companies, but also of looking for financial products that are suitable to invest in them, such as stocks, securities, currencies, public or company debt or other investment funds.
Tips for choosing an investment fund successfully
Although an investment fund can be a very attractive tool to achieve a return with that money that you reserve "for what may happen", choosing the one that really suits you is not as easy as it seems. And the problem is that a bad choice can end up with a very negative result for you.
But are there some keys to choosing a successful investment fund? Of course, and then we talk about them.
Read the investment conditions
A 20-year investment fund is not the same as a five-year investment fund. When investing in the long term, it is easier to take risks, since we are talking about money that we know we have, that is moving, but that we cannot touch (although that depends). On the other hand, if it is in the short term, things may change, especially since the profitability will be lower and the result may not be what you expect.
Therefore, it is important that, before deciding, take a look at the investment policy of the fund, to know what you are conditioning yourself to, the time you are going to have these savings "committed", and the profit you will receive in return.
Of course, if there are concepts that you do not understand, you should talk to an expert who can explain everything to you, since meddling without knowing can generate misunderstandings or future problems.
Examine the history of the mutual fund
You may have many types of mutual funds in which to invest your savings, but are they all good? That's where you should carefully study the history of the mutual fund.
In fact, experts recommend collecting data from the last five years to see how the evolution has been comparing it with that of the market. Thus, you can see how profitable this is and if it is really worth it.
Who will be the fund manager
Knowing which investment fund you are going to put your savings is just as important as knowing which person or company you are going to let manage that stake you have. In fact, you should investigate about that person or team to know if they really are professionals and how they work since it could be the case that you choose experts who give you high profitability and others who do not achieve expected results.
It's also good maintain an active relationship with the manager, that is, to know a little more about him, to be informed of what he does, the progress he makes, his way of acting ... All this will give you peace of mind and confidence, since you have a person who informs you of the movements and results you are getting. The opposite, that is, giving your money and not knowing again for a long time, can generate insecurity and fear for the decision you have made.
Within investment funds, there are some more suitable than others. Everything will depend on the amount of savings you want to invest, where and with what manager. Obviously, if these professionals understand the market well, they will know where to invest in order to get the maximum return, but when you don't have great savings, it is better to play it "safe", especially at the beginning.
Beware of commissions
When investing in a fund, you must be aware that it will involve paying commissions. These will depend on each specific entity or fund, but normally you will find the following:
- Management and deposit fee. They are commissions that the manager itself applies. These are reduced from the value of the fund.
- Subscription and redemption commission. They are commissions that are charged directly to you when you subscribe or the shares are reimbursed.
In short, the guidelines that you should take into account are:
- Choosing an investment fund that adapts to your profile, always with a professional manager and with knowledge of the specific subject.
- Have a long-term profitability, As long as you assume the level of risk you can bear (it is not advisable to invest more than one can bear).
- Establish adequate investment fund conditions for your profile.
Best investment funds in Spain
If after what you have seen you are considering the option of investing part (or all) of your savings, the decision you must make is part of deciding which investment fund manager you are going to trust. In Spain there is a great diversity of companies and entities that are dedicated to this, so you have options to choose from.
However, some can stand out above all, especially depending on the category of the fund, be it technology, energy, global, mixed, guaranteed, fixed or variable income funds ...
Names such as Abanca, Bankinter, Bankia, Sabadell ... They will sound familiar to you because they are related to banks, but among their services they can offer you to be investment fund managers. In fact, they are the first choice of many beginners since it is a way to invest through an entity that you trust (well because of your reputation, because you are a client ...).