Instability? Well, this seems the common denominator of the financial markets for the next few months. Having disappeared from investor operations for a long time. Because indeed, everything seems to indicate that geopolitical risks and the electoral processes that will take place during this year will infuse certain imbalances in the financial markets. To the extent that it can change the course of the trend anytime. You will have no choice but to be aware of them to make the savings profitable during this year.
Because indeed, all the signs point to politics will set the course of the financial markets again, above other considerations linked to purely economic approaches or linked to equities. In this sense, it will be necessary to be aware of the elections that will be held on the European continent in the coming months. The list is one of the most complete that you can find: Great Britain, Italy, Germany and it may also finally join Spain. Quite an incentive for stock prices to show strong fluctuations.
All these electoral processes should make you a little more cautious hereinafter. You must control the risks that the operations you open in the financial markets may entail. And the best way to carry it out will come from a broader diversification of your available capital. If you can, focus not on a single security, but on a basket of stocks that can be combined with other financial assets. It will be one of the smartest strategies to deal with the less favorable scenarios of equities.
Increased risk of instability
All these incidents that the policy can bring will not be the best ally to obtain benefits in the stock market. If not, you can be much more prone to lose money. To levels that at some point you can not assume, with the logical problems in the balance of your checking account. Anyway, you can't forget that as always new business opportunities will arise as a consequence precisely of this instability in the equity markets.
Because you must know that you can not only make money with the stock market on the rise. But also on the downside through such characteristic depths as are inverse investment funds or sales on credit. Although at the cost of take greater risks in operations. Because the reward may be higher than that offered by more conventional products. It will be a very opportune moment so that during this year you are more predisposed to change your investment strategy. Even varying destination in terms of the location of the international stock markets.
The Spanish economy improves
The positive aspect will be provided by the growth prospects in the European economy. Not surprisingly, it cannot go unnoticed that the International Monetary Fund (IMF) raised the growth forecast for Europe and emerging countries. Also in Spain, where they foresee that this year's GDP could grow to levels very close to 3%. Something that can certainly encourage buyers to enter the markets. With greater optimism for its operations on the stock market.
But, to what extent will these growth expectations be eclipsed by the instability generated from the electoral processes? Only time will be able to find the exact answer, leaving you hardly any maneuvers to develop a correct investment strategy. As it happened in previous exercises. It is the toll that you will have to pay to choose a year as complicated as it is foreseeable today. Where anything can happen, from significant increases at the end of the year to consummate a change in trend and close the year in negative.
The euro can gain strength
There is a scenario that few analysts foresee and that therefore must be analyzed from now on. It is none other than the real possibility that the euro gains strength in the second part of the year. The reason is due to something as simple as global investors returning to the stock markets of the euro zone countries. As a consequence of this new scenario, the continuation of the current upward process could be more than a theoretical approach. It would help the indices to follow is their climb of rise in the price of the shares. At least for a few months at least.
Another aspect that can benefit equities during this period is that profit recovery be maintained or even advance in the coming quarters. It would be one of the best news you could receive to make your movements profitable in the financial markets with greater success. Above other equally exciting scenarios to defend your interests as a small and medium investor. It is another of the parameters that you must take into account to open your operations.
Signs that ask to denote instability
It will be very important that you detect the signs that can anticipate the greater volatility of the financial markets. Some of them will be easy to understand, while others will require more complex analysis. In any of the cases, they will give the behavior guidelines by which all your actions will be due with respect to relationships with the always complicated world of money. And where they will basically be the following that we expose you below.
- Any electoral result in the European elections that are not to the liking of the financial markets. There will be so many elections that any one of them can cause an immediate and radical change in the stock markets.
- The possible trend changes in monetary policy, both on one side and the other of the Atlantic. In this sense, it will be necessary to be very expectant about what happens with the interest rates of the United States and the countries of the euro zone.
- The possible appearance of a bubble in international public debt. To the point that it could be the trigger for a bearish rally of some importance. With a cut in the price of the shares more than important. Not in vain, you can buy the price of the shares at more competitive ratios than at the moment.
- When a price correction more important than usual. Because in this way it will go from an upward or lateral trend to a clearly downward one. Even to visit trading levels not seen in recent years.
- Another of the clearest signals that the financial market can offer you is the imposition of short positions about the buyers. In this sense, a decrease in the exchange of securities will be one of the keys to anticipating this very particular scenario.
- Finally, you can not forget that at some point the bags will have to rest after the last climbs. Because in effect, in equities nothing goes up or down forever. Rather, their movements are governed by very well defined phases or cycles. You will only have to follow the trend of each moment. Nothing more, since it will be a very useful strategy for your personal interests.
How should you act?
The most important and definitive moment has arrived to import your performances into the stock market. Actions on how your operations should be governed from now on. They will not be very difficult to apply and in return they will provide you with more than one joy from these moments. These are some of the most important that you have in your hand to carry them out with greater success than on other occasions.
Save some liquidity to prepare to take advantage of the bargains that will be generated in the exchanges around the world. You can buy stocks at unimaginable prices until a few months ago. You must have the necessary ammunition to carry out these operations that can be so profitable to improve your assets. In this sense, the instability of the financial markets should not be taken from a negative point of view. But rather from an opposite point of view, that is, as an opportunity offered by the markets to buy the shares at a better price and thus make the savings profitable with a more optimal potential in their returns.
What can generate instability?
Even if you think that instability in the stock markets will be your best allies, you may change your mind over time. Because in effect, you can also take advantage of this trend. How? Well, through the following tips that we expose you below.
- Waiting a few months on your decision to go public so you can find a much more competitive prices that until now.
- Through reverse products in which you make profitable operations with falling markets, with a very strong intensity in terms of the gains generated in the movements.
- Betting on a falling value you will be in the best conditions to generate the best benefits. Although you have to be very sure that this trend occurs since it is an operation that carries excessive risks.
- It may be the perfect excuse for you to return to the lifelong banking products. The interest that they will give will not be very high, but at least it will be guaranteed every year. With a return on your savings that will range between 0,50% and 2,00%. It is sure to bring more stability to your savings program.