One of the alternatives that those who stop channel your investments it is through the long term. However, a question that arises with some frequency is what is understood by this period of stay. Well, in a general way you can consider that it is a long-term investment when the positions are destined for a minimum of two or three years. But without any limit in terms of expiration dates since you can choose any term. Even eternalizing it as a way to create a savings bag for your retirement.
These kinds of investments are intended for very well-defined users. They are people with a very defensive profile and in where safety prevails over risk. It coincides with a good part of the older investors who want to make their savings profitable through these proposals in equities. In any case, it is not aimed at operations of a speculative nature or that require greater flexibility to order purchases and sales in the financial markets. Not surprisingly, it is one of its main hallmarks.
Long trades they do not demand anything special, unlike operations aimed at the shorter term. It is precisely for this reason that no class of small and medium investors are excluded. Everyone can take positions in these long time frames. Where what they are looking for is to give an outlet for their financial contributions to achieve their maximum performance. In addition, by extending the terms, it allows the returns on savings to be much more attractive than if they are destined for the short or even medium term.
Long term, why choose it?
One of the most relevant reasons why you can opt for this model in investment is because it can provide you with greater security in the operations carried out. Because in effect, you have the time necessary to recover the positions if for any reason the evolution of the shares does not behave as you expected from the beginning. As a consequence of this important characteristic you will not feel obliged to meet deadlines. But on the contrary, you will be able to have much more patience than in other situations and scenarios. It will be one of investing your money in a more relaxed way than others.
These operations are also characterized by the fact that through the time their positions last, you can vary them to your own liking. That is, make new buybacks or through partial or total sales. With a very clear objective and that is none other than adapting to the new scenarios in equities that may arise. Both in the bullish and bearish movements in the financial markets. So that in this way, the rewards are greater when you decide to settle your positions in the financial markets.
Capital for these operations
Another question you should ask yourself is the amount you should give to share purchase operations. In this sense, there are not many differences with respect to the operations in the short and medium term. Although with a very relevant point and that has to do with the forecast. It refers to the obligation you have to foresee the expenses that you will have to face in the next years. Among them, tax obligations, the children's school, household bills or the budget for vacation trips.
From this scenario, the amount that you will have to contribute to these investments is very flexible. Depending on the accumulated savings and the budget you have assigned for the next few years. In any case, you will have no choice but to leave some or enough liquidity in your checking account. To be proactive in the face of anything that may happen to you from now on. In any case, this is a very personal decision that you should meditate with some calm. But above all through your calculator to show what is the amount that you can finally allocate for investing in the stock market.
What are the best values?
This is another of the aspects of greatest interest to investors specialized in the long term. Because not all of them are the most suitable. Not much less as you can imagine. To the extent that they must be stock market values and with very clearly defined characteristics. It will be very important that they do not have great volatility in their price quotation. But rather the opposite, and that they present few differences between their maximum and minimum prices. So that in this way you do not get a really negative surprise and that can cause your investment portfolio to depreciate.
Once these important filters have been applied in the selection, the next step will be to detect stable proposals in the markets. So that you are in the best of conditions to achieve a fixed performance every year. Although of course you do not expect very important percentages. For this, there are other securities that perform better in the shorter terms of permanence. The values that be very liquid and that they have the confidence of the financial markets.
A good decision will be to opt for the representatives of the electric sector. They offer greater security than others that are no less relevant. In addition, they are very conducive to developing this kind of operations. Where you do not expect spectacular revaluations, but instead they can help you to configure a more powerful savings bag for three, four or five years. Another segment of equities that can be very useful to promote this investment strategy is that which refers to food. Because it performs even better in the most adverse scenarios for equities. Both in the national financial markets, as well as outside our borders.
High dividend yield
Nor can you forget in the choice of this portfolio the securities that have an excellent dividend yield. Because in this way, you can make sure a fixed and guaranteed return every year up to 8%. Much more profitable than bank products (time deposits, business notes or corporate bonds). In which cases, at the moment they do not report more than 1,5%. Well, this is a very practical strategy to provide yourself with liquidity every year, but without forgetting about equities.
You have the great advantage that you have a lot to choose from. From all sectors and under all characteristics. So that in this way, you can make the most effective decision to defend your interests as a small and medium investor. All of it, regardless of the evolution of shares in financial markets. Because in effect, you will have two ways to increase your capital from now on. And especially if your positions are aimed at these long deadlines. Even to allocate it for when the moment of retirement arrives.
What strategies can you use?
In any case, you have several lines of actions for investment in the longer term. One of them consists in letting the profits accumulate. As on the other hand it happens with the denominated values piggy bank. Where its value is appreciating little by little and without really substantial differences. Another of the strategies that you can use in this kind of timeframe is ask you an expiration, whatever it was, and not worry about what could happen to your proposal in equities. Although for this you will have no other solution than to choose a value that is very stable.
On the other hand, you can not miss in your operations to opt for the most defensive securities of the financial markets. They will not give you many surprises and you will have a good chance that the capital gains have been installed in your income statement when they expire. These are companies that are dominated by very short movements in almost all trading sessions. And they are generally represented by small and mid-cap companies. Of course, you will not have to look for them in the blue chips or even in the most relevant values of the stock market, both nationally and internationally.
Another contribution that financial markets offer you is that you can diversify your positions in the stock market. Through combination with other financial assets and of diverse nature. Among which are the precious metals, raw materials and other more original alternatives. The risk is significantly higher, but in exchange for raising the returns that you can obtain on the invested capital. In any case, you should have more control over your positions to prevent any unwanted scenarios.
Because in effect, you can allocate part of your money to the long term and the other remaining part to more flexible operations. Not necessarily linked to equities. But on the contrary, you can opt for other alternative models. It is a very particular investment strategy that mixes several management models. Under proportions that will be defined according to your economic possibilities. But also because of the profile of a small investor that you present at any given time. In this way, you can broaden your goals without neglecting the longest trades in terms of expiration. In any case, it will be one of the most original performances that you can choose from now on.