The Investment funds Equities are the products that base their portfolios on exchanges around the world. They are more likely to monetize savings with higher profit margins, compared to fixed income, mixed, or even alternative. But in the same way, the risks that you can contract are more acute. To the point that it is not very strange a very important loss of equity if the trend of the stock markets is not adequate.
One of the great advantages that you have when opting for these products is because the offer that the managers present is very wide and diversified, with all kinds of proposals, and for the most demanding profiles. Some of them were unimaginable until a few years ago, as they are truly innovative products. And where you can only reach them through investment funds. They cover all geographic areas, but also stocks, sectors and stock indices. There are no limits to your proposals, involving stock exchanges from all over the world.
Within investment funds there are two models in its confection that may be of interest to you. On the one hand, the static ones, which maintain your investment portfolio for many years, without changes or modifications in your financial assets. They have the advantage that you will know from the first moment where you have invested the money, and as a consequence of this commercial strategy, the certainty of how they will react to any economic scenario. They have a predilection among the more conservative investors.
Flexible investment funds
And on the other hand, flexible investment funds. Increasingly in demand by all investors, not just the most defensive. They are characterized mainly because their portfolios are modified according to the trend of the financial markets, even providing some fixed income to the products if necessary. Not surprisingly, this class of funds can adapt to all trends in international stock markets: bullish, bearish and even lateral. All are covered by the management companies. And based on them, they update their composition.
This type of investment allows participants in these products to be able to protect yourself from bearish scenarios in equity markets. Even through certainly original strategies that make them highly advisable in certain situations. To the point that it is a modality in notable strength in recent years, being able to choose between many models that the managers of these financial products have been developing. Being directed for periods of economic uncertainty.
Another chosen management format are the hedged currency funds. And that can be very beneficial to protect you from the instability of some international currencies, mainly the euro and the US dollar. You will surely find many investment funds that provide this unique feature. And that you will have them as an alternative to develop the portfolio of these products from now on.
They cover all the bags in the world
But if variable income investment funds are characterized by something, it is because you can choose the destination of your savings. Until reaching unsuspected stock exchanges, on the African continent, or even in Eastern Europe. There are no limitations of any kind to subscribe them, and if you are going to invest in them in the coming months, you already know that you can go to any stock market, no matter how far away it may seem. Although it is true that the presence of the European and North American markets dominate most of these stock market proposals. Even combining different places in the same fund, as a commercial strategy to diversify user savings. And in this way, protect yourself from scenarios that are not favorable to your interests.
If instead what you want is invest in emerging countries (Brazil, India, Mexico, Argentina, South Korea and many others), you will not have any problem finding them either. The offer is full of these investment funds, through different models that you can subscribe depending on market conditions. However, they are more prone to volatility, since they tend to rise more, but for the same reason, depreciate more sharply.
Funds based on national stock exchanges
If, on the other hand, your intention is not to leave national borders, you will have an even more expansive offer. Being able to choose sectors, companies, and even if you want those that distribute dividends among their shareholders. With a notable advantage over other funds, and that is your commissions will be more competitive, being able to lower their rates by almost half the price compared to international markets. Another of their contributions is that you will have easier access to these products due to their proximity, as well as to follow them through specialized media.
By developing different management models, they will make your decision more difficult to make. It will even take several days (or weeks) to determine which ones best suit your profile as a small investor. It will not be strange, then, that you need the advice of a professional in these products, who is the one who finally channels your positions in equities through these designs.
Build the investment portfolio
It is not advisable that you opt for a single investment fund, but for several, and if possible of a different nature, which finally make up your investment portfolio. On the other hand, and to protect savings, the ideal scenario is that the combine with other different investment funds. Where, of course, products based on fixed income, mixed models, or even alternatives should not be lacking.
The proportion in its composition will be determined based on the profile you present as a saver: aggressive, intermediate or conservative. And that can be varied regularly as market conditions change, or you simply see that its performance is not the most suitable for your personal interests. A portfolio based on three or four mutual funds will be a good starting point to start making the assets profitable with greater success.
Diversification, on the other hand, will be a basic rule in your actions, always trying to find funds that complement each other. And under no circumstances duplicate them in their portfolios, since you would be affecting a very common mistake among investors: being participants in investment funds with similar characteristics. You should avoid it at all costs if you don't want to have a negative surprise from now on. You are still on time, do not forget.
Decalogue to develop your portfolio
Due to the special characteristics of equities in general, you will have no choice but to import a series of actions to protect your investment funds. And trying to achieve the highest capital gains, and in all economic scenarios. Of course, it will not be an easy task, but if you act with determination, and a little discipline, you will surely have managed to meet the objectives.
To make your wishes come true, there will be no other solution than to follow a series of tips whose main purpose is to channel your savings through investment funds based on equities. And that would basically start from the following premises that we list below.
- Try to search the stock markets with higher profitability on their financial assets, eliminating from your portfolio those that generate greater instability, or are directly governed in their price by a clearly downward trend.
- Among several funds with similar characteristics, Always decide for what lower commissions entail in its contract clauses. It is one of the best guidelines to correctly channel your investments.
- You will have no choice but to assimilate the risks you take with equities, although the yields can be much broader than in the fixed, and that in certain years they have reached up to 40%.
- Look for a more flexible format in the funds, which allows you to operate in all possible situations, from those that are most favorable to your interests, and those that are not so, but always obtaining a return on your operations in the markets.
- Not all exchanges are equally favorable (or harmful), and your mission will consist of detect the most bullish stock markets at all times, which will require greater flexibility in the selected models.
- Do not allocate all your savings to investment funds, but complementing them with other safer products and with guaranteed returns (term deposits, bank promissory notes, bonds, etc.), which will give consistency to your global investment portfolio.
- Try by all means to select those investment funds that are trade under local currency (euro), and that you will not incur any commission for the currency exchange. So that in this way, you can contain the expenses of these financial products.
- By having such a powerful offer, you will have no choice but to be very selective in the choice of equity funds, looking for the most profitable models. And if possible, they have the most competitive commissions in the market.
- Do not allocate much of your monetary capital to this class of funds, much less to markets with greater risk, such as emerging markets or more or less exotic stock exchanges. You will risk your contributions in excess.
- And finally, never forget that the ideal term of stay for this class of financial products It is intended for the medium and long. For shorter periods it is preferable that you opt for other more agile designs and recommended for these occasions. Exchange traded funds, stock market or warrants are some of them.