Internet Europe is the index that collects the quotation of the most important companies in this technological sector in the old continent and, which includes from consolidated companies to others in the process of expansion. Although the offer offered by this stock market segment is clearly below those currently offered by the North American or Japanese bags, both in quality and quantity. In any case, it constitutes an alternative to the preferences of small and medium investors. In a sector, it is true that its operations in the equity markets carry more risks.
The main Internet companies have been grouped into a technological benchmark so that all investors can operate in them, after the gap marked since the technology puncture. For several years they have regrouped in what is called the Internet Europe sector, where it stands out for the absence of Spanish companies. Not surprisingly, there are none of these characteristics listed on the national continuous market. If not, on the contrary, there will be no choice but to go to the Alternative Stock Market (MAB) to find a company with this profile.
Much of this stock offering is unknown to retail investors since most of them are in expansion processes. With a somewhat more complex valuation in the equity markets due to its special characteristics. Despite this, the offer is very far from that provided by Wall Street, which is one of the most powerful in the world. Both in number and quality and ahead of the German and Japanese offer that would be one notch below. Where volatility is the common denominator of their actions, with wide differences between their maximum and minimum prices.
How to invest on the Internet
It is a very volatile sector, where not all companies that are listed in equities are governed by the same stock market rules. They are very conducive to speculative cutting operations or even for develop movements on the same day or intraday. In any case, they are not very suitable to carry them out in the medium or long term due to the risk they entail for this type of operation. On the other hand, they are characterized by the strong fluctuations they have in their price on the equity markets where they are listed.
While on the contrary, they can generate a very aggressive investment portfolio to small and medium investors. As a consequence of this characteristic, it can be said that this class of very special securities are not suitable for all profiles of savers since they can cause some other problem in the management of their securities portfolio. As has happened in recent years, where there have even been cases in which investors have left many euros behind. Your risk, therefore, is much higher than in other securities.
Contributions in this investment
The values linked to the Internet sector are distinguished because they are very well defined and that make them different from others more traditional sectors. This is one of the reasons why it is very important to know which equity markets to target. Not all are valid to meet this requirement. Not surprisingly, the supply of the European stock market is in deficit when compared to the proposal of the North American and Japanese stock exchanges. None of the securities in this sector operates in equities in Spain. There is no other choice but to go to the German, French or Italian stock exchanges to carry out some of the buying and selling operations on the stock exchange.
On the other hand, it should not be forgotten that revaluation possibilities in these values of international equities they are huge due to their special characteristics. But also with a very high risk that they may depreciate with a certain intensity and to the point of losing a good part of their valuation in the financial markets. This is an aspect that must be taken into account when hiring your title and avoid the odd surprise in your assessment. As has happened in previous years with some of the securities from the Internet sector.
They do not distribute dividends
Another of the hallmarks of these very special securities is that they are listed companies that do not distribute any dividend payment. That is, through them you cannot obtain a fixed and guaranteed return every year. Partly because they are companies that at the moment they do not find benefits in your business income statement. This is a factor that detracts from them somewhat of interest in the face of more defensive or conservative investors in financial markets. Who want to create a portfolio of fixed income within the variable and that through this class of companies they are not able to achieve their most desired objectives.
On the other hand, it is a stock market sector, which although it has a lot of interest for investors and with a great future ahead of it, it is also true that it is clearly overvalued compared to other stock sectors. Sometimes with prices above your expectations in the equity markets and that can produce very strong cuts or corrections in the conformation of their prices. This makes them stand out at first glance for the wide differences that they show between their maximum and minimum prices and that they can reach levels even higher than 5% in a single trading session. So you have to be especially cautious when taking positions in your representatives.
No reflection on the Spanish stock market
Of course, it seemed unthinkable just a few months ago and especially at the end of 2019 that the selective index of national equities would approach levels close to 9.600 points. But the truth is that the selective index has succeeded at the end of the day, although without the help of the Internet sector in the stock market. Simply because they are not present from the beginning. Only in the moments when Terra It was listed among the 35 best Spanish equities, but ending in the way we all remember them. After climbing around 150 euros, the stock collapsed and came out of the national index.
This is the only experience of any value that has maintained some kind of connection with the Internet sector and of course it was not very positive for a large sector of small and medium investors. If not on the contrary, it was clearly disappointing because many euros were left on the way, and despite the obvious risk involved in their actions in the financial markets. This is an analysis from which many consequences must be drawn for the coming years as it is a clearly emerging sector with a very immediate future.
Take positions in these companies
If for any reason your most immediate desire is to open positions in a company with these special characteristics, you will have no choice but to follow some behavioral guidelines to protect your available capital in equities. Not surprisingly, you can lose a lot from now on, as experience in recent years has shown you. With a series of recommendations that you must apply with some discipline and a good dose of rigor in investments. As in the following points that we expose you below:
- You will have no choice but go abroad, to international markets, to meet this special demand. Specifically, in the squares located in the United States, which is where these values that we are talking about at the moment are mostly concentrated.
- Su volatility it is often extreme and in any case higher than that shown by other stock sectors on international stock exchanges. Where it is necessary that you know how to operate with this kind of stock market proposals.
- The offer is not very wide although it is one of the sectors that has been growing the most in recent years, as it is logical to think due to its special characteristics. It is not an incipient sector, but on the contrary is emergent It is not the same.
- You will be exposed to new sensations in the equity markets since these securities are governed by criteria other than those of the rest of the business segments listed on international stock exchanges.
- As in all sectors in financial markets, there are better values than others and that is where your decisions should be directed from now on. Above other technical considerations.
- And finally, assess that they are companies so as not to have them in very long terms. If not, on the contrary, they must be very short periods of stay. As soon as you have profits, you must liquidate the operations to enjoy the capital gains.