As the first half of the year is about to end, it is a good time to consider what would happen if from now on, equity investment suffered a severe setback. It is a scenario that is not very far from reality in the opinion of some financial market analysts. Especially when a greater slowdown than expected in the economies of the old continent. And all of them after the first period of the year is going to be settled with a balance in the equity markets that should be classified as moderately positive.
Well, we are going to give you a series of tips in case the dreaded collapse in the equity markets eventually occurs. So that in this way, you are in perfect disposition of protect your personal assets or family. Because you cannot forget that if this happened from now on, there will be many euros that could leave you on the way in stock market operations. Therefore, you must be prepared for this possible scenario that may emerge at the least expected moment by small and medium investors. Beyond other technical considerations in stocks and maybe also from the point of view of their fundamentals.
One of your main priorities from now on is to anticipate these very violent movements on international stock markets. Even with the real opportunity that also in this very negative scenario you can monetize savings with great efficiency in operations. While on the other hand, you should not relax after the performance of the financial markets during the first half of the year. It can be a mirage that leaves many savers hooked, especially those with less experience in the hiring trading floors.
Investing: opting for defensive stocks
One of the most effective investment strategies to protect yourself from these kinds of scenarios in the financial markets is the contracting of defensive character values or conservative. Where in the most adverse scenarios they can develop a better behavior than in the rest. This has happened during the last part of the year, with the representatives of the companies in the electricity sector. While the selective index of national income obtained significant depreciations, the values of this business segment appreciated around two digits.
On the other hand, it cannot be forgotten that these types of companies are listed they distribute a very attractive dividend among investors and whose intermediation margins range between 5% and 7%, being one of the highest in national equities. Above those generated by other banking products, such as high-income accounts, time deposits or corporate promissory notes. In any case, it constitutes a powerful strategy to create or develop a fixed income portfolio within the variable. To create a stable savings bag for the medium and long term.
Go to alternative markets
There is no doubt that an excellent solution to make profitable savings in periods of instability in the financial markets is based on the contracting of alternative products. That in all cases they can do it better than the stock market, as has traditionally happened with some of the materials more relevant as in the case of gold. On the other hand, it cannot go unnoticed at this time that the yellow metal shows an excellent technical aspect as it moves through a well-defined uptrend.
Another alternative financial asset can be oil if its prices remain under the current buying trend. In this case, there will be no choice but to go to the international markets where it is listed, especially the United States. Although for this you have to support commissions that are certainly more expansive than the national ones. But it will be an operation that will really be worth it since the profitability that can be obtained is much more rewarding. Especially if their prices exceed the level of 75 dollars a barrel.
Diversifying investments
Another of the investment systems that you can use to get out of this trance in the equity markets is by diversifying your investments through different financial assets. Instead of depositing all your savings in the same basket, it is highly recommended that you distribute in various financial products: investment funds, purchase and sale of shares on the stock market and of course also in fixed-term bank deposits. In this way, you will be protecting your positions in the financial markets. And in the worst case, there is no doubt that you will limit the possible losses that you can generate from now on.
In addition, it is a very practical way for you to avoid situations that are very complex for your personal interests. Where the situation may arise that you lose a lot of money in a single security or stock product. It is very worthwhile to distribute the available capital in several baskets that help to make the final balance in your investments really positive. Which is at the end of the day one of your highest priority objectives when face any kind of investment. Combining, if possible, equities with fixed income or even with alternative formats, as do investors with more experience in this kind of situation.
Choose active management
Active management in the world of money always offers excellent results at times of greatest instability in financial markets. Among other reasons because it is known adapt to any type of scenario in the financial markets. Even in the most unfavorable for the interests of small and medium investors. Beyond other considerations of a technical nature and maybe even from the point of view of its fundamentals. Above the results that passive money management offers you.
While on the other hand, active management is conducive to going renewing financial assets depending on their evolution. It is a strategy that many savers often forget due to a lack of advice and that can lead them to very complicated situations in these unfavorable scenarios. It is a strategy that is widely used in investment funds, both from fixed income and variable income. Where no financial asset is renounced, but the best are selected at all times.
Better liquid values
Another system that never fails in these cases is to choose a product or securities that provide great liquidity. With the main objective that you can exit your positions in the worst moments of the financial markets. So that in this way, you cannot be caught in bearish positions that can cost you a lot to get out of them. It is also very worthwhile that you opt for this investment model that will be very easy to apply and without any additional expense. On the other hand, it will help you to be in a position to better adjust sales prices in operations on equity markets.
In this sense, there is no doubt that you must avoid small caps they always give you a lot of trouble getting in and out of their positions. To the point that they can make you lose money in a completely unnecessary way, as has happened on some occasions in your history as an investor. With some unwanted effects for your personal accounts.
Market operations
The fixed income market maintained a high level of activity. Where the cumulative total volume In the year it grew by 77,9%, after trading 28.750 million euros in the last month, 85,3% higher than in February 2018. Additionally, issues admitted to trading increased by 7,8% since the beginning of the year and the outstanding balance increased 2,9%. With regard to the financial derivatives market, trading increased by 3,9% in the first two months of the year compared to the same period of 2018. This increase was focused on equity futures, which registered an advance of 314,6 %. While on the contrary, trading in Ibex options rose 14,8% in the month.
On the other hand, it should be noted that the open position of all financial derivatives increased by 7% compared to the previous month. The main increases were registered in futures and options on the Ibex 35, with increases of 6,8% and 16,5%, respectively. While the futures and options on stocks also had growth. In these cases, 3,1% and 6,6% in each of the investment formats. Highlighting the interest on the part of small and medium investors in equity markets. At times like the current ones where the profitability of fixed income is at historical lows. With effects on stock prices.