One of the channels you currently have to invest your savings is through investment funds based on equities. It is one of the alternatives that you have to position yourself in the stock market. You may be doubting whether to opt for buying and selling stocks in the stock markets or for these products that are more flexible. So that you have more foundations in your decision, we are going to explain to you what are some of the advantages that these models present to make the savings profitable.
In principle, it should be noted that there are no good or bad products. But everything will depend on the profile you present as a small or medium investor. And of course the level of risk you are willing to take for the next few months. Once you are clear about these approaches, it will be the definitive moment for you to start your investments. Knowing at all times that you are facing variable income, and you can win or lose. Depending on what the financial markets dictate.
Investment funds linked to equities is a product that is characterized by the fact that it has been definitively installed in the banking offer at the moment. You will have no problem hiring one of these funds. You can even choose from many models that the managers have made. Although they have the same structure, their nature is very diverse and this is a first advantage that their hiring entails.
Funds: forms of investment
If you are hesitating to start operations through this investment model so introduced in the banking offer, you should consider one of its main contributions. It is none other than the opportunity it offers you to create a basket of shares. As opposed to buying and selling stocks on the stock market, where you focus on just one security. In funds, their structure is different because you are a participant in various financial assets. It can have the origin that you yourself want. No limitations or exclusions.
What do you get through this investment strategy? Well, something as simple as that you will be diversifying your positions in the equity markets. Through various stocks, sectors or indices of the stock market. It will not be you who selects them, but they will already be imposed on you by the models developed by the management companies. As a consequence, you should not worry about whether this is a better value than the other. You will only have to decide to subscribe the fund in question.
This technique in its preparation can be very beneficial for your interests. Not surprisingly, it can help you protect money in the most adverse scenarios for your personal approaches. Because you will be protected through a diversified investment. You may not collect the best returns in the best moments of the stock market. But for the same reason, the worst ones will have a much less negative evolution than through taking direct positions on the stock market.
Offered with a very wide offer
Other of the main contributions that derive from your hiring is that you will have many models to choose from. More than you might think at first. This will help you to channel with greater guarantees the strategy that you are going to use from now on. You can choose national markets and what is represented outside our borders. From the most powerful stock exchanges in the world, such as the German or French, to even unexpected markets that until recently you had no news about their stocks. It occurs with some small countries from the African to Asian continent.
Through any stock market that you think can be very profitable. Or at least more than the rest. As you can see, the advantages of investment funds linked to equities are more than remarkable. To the point that you will have more than one problem for your choice. Accounts with excessive proposals that will make it more difficult for you to make any decision at the specific moment you decide to invest your savings through this financial product so well known among savers.
Even with the possibility of combining them with other financial assets. As for example with fixed income. Although in this case we would no longer be talking about equity investment funds, but about mixed models. Of which we will discuss in another article. Well, they offer you an infinity of variations, which on the other hand the stock market cannot give it to you. It will be very important that you value this feature when you decide to invest your savings. But you are not sure through which investment model.
Are mutual funds expensive?
With all certainty, another approach that you will make at this precise moment will consist of whether its formalization will cost a greater financial effort. In principle it should not be this way, since they depend on the fixed commissions they impose. They are not the same in all cases and depend on many variables to take into account. In any case, there is one thing that you must be sure of and that the maximum that they can charge you for contracting investment funds is 2% of the invested capital. Although it rarely reaches these levels, as you can see through the current offer that these financial products offer you.
There are many kinds of commissions, but in all cases they apply to you. They can be management, deposit, subscription, etc. And a very curious one that is newly created. It is the so-called profit commission. It is based on something as simple as that they will charge you a rate if you exceed a minimum profitability. But with all certainty that it will be one of the ones that you least care about paying. Yes? Not surprisingly, it is a strategy that managers are designing in recent months to market their products.
From this general perspective that is presented in the investment funds of the stock market, the expense that may involve you may be higher than that generated by the direct purchase of shares in the stock markets. But under not very striking percentages, and that in any way should not influence your final decision. It is about obtaining the best returns in each situation. And from this point of view, both financial products are very similar and bear the odd similarity.
Transfers to other funds
But if there is any characteristic that can make you opt for investment funds based on equities, it is because you can transfer them freely and without any kind of limitations. Of any kind. But what is much more important, this kind of operation does not cost you a single euro. The only requirement that they will demand is that you carry out the movement with the funds contracted through the same bank.
You can make transfers between investment funds at any time. Faced with a change in strategy, in the face of an adverse fund situation or simply because this is your closest wish. It will not cost you a single euro and you can make as many transfers as you want. As long as you meet the aforementioned condition. It is a very useful strategy for your interests, and something that investing in the stock market does not offer you. It will be a question that you analyze in depth this contributions that investment funds offer you.
In addition, many financial institutions are responsible for paying you cash for transfers you make from other banks. Through very powerful and competitive offers that you can take advantage of right now. It is a banking strategy to attract money from new customers and that is presented under very aggressive proposals with which you can earn money without any effort. You will have no choice but to review the current offer that the banks have prepared to fulfill this purpose.
Are these funds more profitable?
The key moment comes when you must choose the most profitable product. Well, investment funds are neither better nor worse than others, since it will depend on the format contracted. But in normal situations it offers a lower return than if you opt for the bag directly. Or even by other much more aggressive equity products. Not surprisingly, the risk you have is also lower. Since your money will be more protected through its special features.
From this scenario, your approach should be which of them suits you best depending on the objectives you are pursuing and the kind of investor to which you belong. The level of permanence you give to the investment will also influence. That is, if it is aimed at the short, medium or long term. All this and together will make you make a decision about which of the financial products will be worth the most to open positions at any given time.
Perhaps the equity investment funds do not meet your expectations and you have to turn to other significantly different savings models. That is a decision that will only be up to you to make. And therefore it must be very thoughtful in any of the cases. Not surprisingly, it is you yourself who is gambling the money and who has to assume responsibilities. It is that simple, beyond other more complex approaches. Don't forget, if you don't want to have more than one negative surprise from now on. Because it is equities where you are moving.
There is a wide variety of options in the financial world to invest and give profitability to our savings. Whether you are looking for short-term or long-term investments, investing in different financial instruments has become an increasingly common practice.