A good part of the investments are made in euros because it is the majority currency among Spanish savers. However, it is not only possible to operate in this currency but in others of great international relevance. For example, the US dollar, the British pound, the Swiss franc or even the distant Japanese yen. The only thing missing is your decision to invest in a financial asset that is foreign to the euro. But on all the financial products that admit this possibility that on the other hand is the vast majority of them. From the purchase and sale of shares on the stock market to term bank deposits.
Investing in other international currencies gives you the possibility that your investments can improve in terms of the yield generated. But be very careful with this very special strategy because they can also to lose money in each of the operations. Because you cannot forget at any time that foreign exchange is a financial asset that is traded every day in the financial markets. As a consequence of this action, its value is not always the same, but on the contrary, its exchange rate is constantly changing. To the point that you can do business with these movements or perhaps leave you a good part of your capital.
Another aspect that should be taken into account from now on is to detect which are the savings and investment products that support this strategy and under what conditions you can carry out operations. With the aim that from now on you will be in better conditions of improve your bottom line on all your investments. Although there is no doubt that if you apply this system you will be assuming more risk in operations. Beyond other technical considerations and that have much more to do with the characteristics of the chosen financial product.
Advantages of investing in other currencies
One of the most relevant contributions of investing in other international currencies stems from the fact that your returns can increase and sometimes with greater intensity. This is one of the reasons why many investors opt for the operations in dollars, pounds or Swiss francs. Not in vain, they try to risk their money through this unconventional strategy for more traditional users. From this general perspective, many business opportunities where you should know that you win or lose. Because do not forget that we are talking about a financial asset.
Another of its benefits is that it can be chosen from a large number of currencies, not just a monetary proposal. This is a factor that offers a wide flexibility to operations and that allow to take advantage of the good moments in the evolution of a certain currency. Although you have to be especially careful with the deadlines, especially with products with very long expiration since their effects are usually very negative over the years. A clear example that points to this trend is the one represented by mortgages contracted in other currencies. To the point that in a way it is considered a toxic product.
Deposits in international currencies
Of course, term deposits are the easiest way to invest in savings products. These movements are made due to the weak profit margins offered by these banking products at the moment. Not in vain, what it is about is earn a few tenths of a percentage as regards their remuneration. As the movements are more violent. That is, with greater volatility in the price of favored currencies. Where the biggest problem stems from the fact that this trend is perpetuated throughout the duration of the product selected by the small and medium investor.
With regard to term deposits, it is not very desirable to apply this strategy since there is very little to gain due to the weak returns that are generated from this very traditional saving model. While if the strategy is failed, there is no doubt that the profitability in the end can be practically nil. With the disadvantage that the money will have to be immobilized for an excessive time. Not surprisingly, this is another risk that must be taken with the contracting of term deposits. Where you have more to lose than gain. Which is, after all, what your choice is about.
More complex investment funds
Another of the financial products that allow the contracting of other currencies other than the euro are undoubtedly investment funds. Both in its variable and fixed income version. But with a very own characteristic and that is that this operation carries a commission that can hinder the bottom line of the investment. Because in effect, your hiring generates a payment for the currency exchange. A factor that will come against if in the end the desired profitability is not achieved by small and medium investors. To the point that it cannot be a profitable operation for a good part of the holders of this financial product.
On the other hand, you cannot forget that investment funds subscribed in other currencies other than the euro contain many more risks than traditional. Precisely because of this characteristic that we point out to you and that is due to the oscillations of the currency itself in the financial markets. From this investment perspective, there is no doubt that you have to analyze this unique strategy much more in managing your savings. Beyond the fact that the fund in question is very correct to take advantage of the circumstances of the markets.
Mortgages written in other currencies
Nor can we forget about the mortgage loans for the great danger of this operation so special and at the same time risky. Because indeed, the risks compared to other products are enormous. Any failure in the calculation can cost many thousands of euros and it is not surprising that many users have been caught up in this kind of operation. With the end result that they will have paid more money compared to if they had contracted the mortgage in euros. In this sense, you must be very sure that the evolution of the chosen currency is going to be correct. Because if not, the effects are very detrimental to your personal interests.
This class of mortgage loans have been signed in the belief that monetary savings would be very important. But without considering that currency evolution accepted was not going to be expected from the beginning. Even with greater negative intensity than expected and that represents a lot of money in the operation. For this reason, it is not a really recommended product for users because they may have some lags in their personal accounts that in some cases cannot be supported. From this scenario, it is considered a very toxic product and therefore should not be contracted in any way.
Operations on international exchanges
Finally, it is worth highlighting the stock purchase and sale operations in international markets. Its main problem is that its operations entail much more demanding commissions than in national markets. To the extent that they can double or double the rates offered by financial institutions. Everything will be well used if in the end the capital gains are more interesting. Because if this is not the scenario, the expenses will be higher. Without counting on the final result of operations abroad. However, it is an opportunity to take advantage of the call options that are produced in the stock markets abroad.
These operations do not require direct currency exchange, but this operation is assumed by the financial markets. It is in the various commissions and management expenses and maintenance where you will notice that it is a much more expansive operation. Although they are reaching the levels of the previous financial products previously exposed. Although of course there is no doubt that if you apply this system you will be assuming more risk in operations. Beyond other technical considerations and that have much more to do with the characteristics of the chosen financial product.
Because you must bear in mind that investment in other currencies does not imply the same remuneration as those made in the common European currency. Although of course it can be approximated, but taking into account that its volatility is frankly greater. Sometimes under levels in which not even you can assume the operations. Even with greater negative intensity than expected and that represents a lot of money in the operation. It is therefore the time for you to think if it really is convenient for you to change currency to make these movements in the always difficult investment sector. Is it really worth it? In the end your decision prevails.