Flexibility is one of the main characteristics that investing in equities offers. Because you don't need to buy and sell stocks on the stock market. But on the contrary, you can opt for other models, including those from fixed income. So that in this way your contributions are much more controlled and risks they will be much less than until now. Not through a single financial product, but through different alternatives offered by the financial markets at the moment.
The appearance of new savings formats that have equity markets as part of their component is becoming more and more frequent. With the objective of guarantee your financial contributions hereinafter. However, one of its main drawbacks is that the return you can obtain is much less than through direct investment in these financial assets. Where, in the best of cases, a yield of around 4% can be generated, but little more on these margins. In return you will have a fixed and guaranteed interest every year. With which to complement the performance of your work.
From this general scenario, new opportunities open up in the investment sector, but from significantly different approaches with rest to those that you used until now. Everything will depend on the profile you present as a small and medium investor. Because if it is not very aggressive it can be very useful to defend your personal interests. Knowing at all times that they are neither better nor worse than the most conventional models. Rather, you will be able to use them at any given time and as a consequence of a certainly considered change in strategy.
Fixed income combined with the stock market
One of the most used strategies is to mix fixed income assets with investment purely in the stock market in the same financial or banking product. Thus, you guarantee a minimal return on your savings. While on the other hand, it constitutes a powerful weapon to protect your savings in the moments of greatest instability in the financial markets of equities. Of course, you will have more than one proposal that must be chosen based on what your expectations are and the money you want to get from financial contributions. In either case, you cannot forget that there is life beyond the bag.
You currently have proposals of all kinds, although the offer is not really the majority among users. From merely conservative options to others that imply that you have to take some risks. But in all cases they will be opportunities so that you are in better conditions to make the savings profitable from now on. You only have to know what these financial products consist of and what you must do to hire them. Surely at some point in your life they can be of great help so that you can have a little more liquidity in your checking account. Which is at the end of the day what it is, as you well know.
Deposits linked to the exchange
Of course, one of the most characteristic products are the term deposits that provide this peculiarity. Not in vain, they are very understandable for all profiles in the investment sector. They do not require special financial knowledge from the applicants of these banking products. It allows you to avoid the most dangerous scenarios for the equity markets. Because they avoid falls that can be substantial in serious losses for your checking account.
Its mechanics are very simple and it is based on the fact that they offer a fixed interest, whatever happens, and that it can be increased depending on the performance of the shares in the financial markets. Until reaching levels very close to 5%. In either case, there will never be losses, even if the evolution of the basket of shares is clearly negative. In any case, it applies longer periods of stay than in other impositions. Not surprisingly, they have time slots that range from 24 to 49 months. With the additional advantage that they require very affordable monetary contributions for all savers. For only 5.000 euros you can subscribe a deposit of these characteristics.
Combined mutual funds
Another of the investment models that you can choose if you want to apply this strategy are mutual funds that combine equities with fixed income. Or even with alternative financial or monetary assets if appropriate. They are developed by the managers to provide more than one proposal so that it can be chosen by the clients. In this case, no return class is guaranteed, but everything will depend on what the financial markets do. But anyway, as it is a clearly diversified investment, it will eliminate risks of all kinds. Something that does not happen with the sale and purchase of shares and other products with similar characteristics.
This class of products allows the saver to be present in the stock market, but without assuming so many risks. To the point that it will generate greater peace of mind from the precise moment of your hiring. On the other hand, they have the great advantage that have a wide offer investment funds of these characteristics. In this sense, it will not cost you much to choose the model that suits your profile as a small and medium investor. With more weight in any financial asset that you like. In addition, it is a very useful strategy so that you can direct to other international exchanges that are more difficult to access if you go on your own.
Exchange traded funds, intermediate model
Finally, you also have at your disposal the so-called ETFs, s and which are hybrid products. Basically because it is a mix that combines the buying and selling of shares on the stock market with mutual funds. That is, those that we have explained to you previously. Your hiring has the advantage that you can access hitherto unexplored financial markets for you. Because in effect, you can contract shares in the equity markets of practically the five continents. Something that they could not do with direct investment in the stock market that does not admit intermediaries.
On the other hand, exchange-traded funds are more complex products that require a greater financial culture on your part. Factor that can hinder at some point your positioning in equities. In addition, they are more favorable for short or medium term investments in the worst case. It is an investment model that is not adapted to all profiles of retail investors. Among many other reasons for the special composition of their portfolios. Therefore, it is not surprising that you have greater difficulties in its subsequent follow-up. It is a factor that you will have to live with if you want to formalize any of the exchange-traded funds that are present in the banking market.
What is the best product?
The question that you are surely asking yourself at the moment is which of them it is convenient for you to hire from now on. This is a very complicated answer that will go depending on the objectives you pursue on a certain moment. But at a general level, it must be said that if you want to obtain higher profit margins, it will be best for you to opt for the products that incorporate the most risk into their investment structure.
Another aspect that you should look at from now on is that which refers to the terms of permanence. Because in effect, these forms of investment require very demanding deadlines in which you will not be able to have your money. It will be the best time to determine if you can be without this part of the savings. In particular, in the event of an unforeseen expense that may arise at any time. Not surprisingly, it can generate more than one problem to solve these monetary operations. For this reason, it is not at all prudent to allocate all available capital to this class of banking products. Unless you want to be exposed to a serious problem in your personal finances.
On the other hand, you cannot forget in any way that these investment models will not generate spectacular returns. But on the contrary, they will serve so that you can have a regular income every year. Above the return that the banking products of a lifetime produce. But nothing beyond these margins in financial intermediation. Well yes, the security that it will offer you in the most unfavorable scenarios for relationships with the world of money. Because you will know in advance that at least you will not lose anything in any kind of situation. Something is something, after all. Because one of your main objectives will be to protect your assets above other considerations of any kind. It is something that some small and medium investors fall into with some frequency and as in all probability it has happened to you during your life.