Summer is certainly a complex season for equity financial markets for various reasons that we will explain below. So that you can correctly channel your next portfolio of securities since it must be more atypical than at other times of the year. In a few months that traditionally have been very negative for the bags for many years. This is one of the reasons why your actions must be guided by common sense and responsibility for your decisions.
On the other hand, you cannot forget that we started from a very bullish position in the equity markets. Since it is foreseeable it is there price valuation corrections in actions to adjust the law of supply and demand. Not surprisingly, there is a certain assessment in this aspect and that can be corrected at any time and it is not possible that this scenario can occur in the summer months. Therefore, you will have no choice but to be prepared for this special scenario.
It should also be noted that in these months the volume of recruitment decreases with great intensity. A factor that causes the price volatility of the actions and that causes that the risks are greater for the positions of the small and medium investors. Insisting that the differences between their maximum and minimum prices can be widened. A scenario that does not occur in other months of the year, so that in the end the movements are more radical from all points of view. Where errors are more frequent than are committed by all agents in the equity sector.
Summer, what can we do?
Faced with this very special scenario that develops in the summer months, various investment strategies can be applied. One of her passes by opting for liquidity in the current account of small and medium investors. With the primary objective of preserving your personal or family capital and avoiding any kind of leakage that may surprise you in these months of the year. On the other hand, you have to be very aware of the evolution of share prices before what may happen during these days.
Liquidity is a strategy that we can take only in an exceptional way and until the return of the holidays. Where we will already be able to carry out operations in the stock market as usual and perhaps with much tighter stock prices that may occur in the foreseeable drops in the valuation of listed companies. From this point of view it can be a very beneficial operation for our interests in relation to the always complicated world of money.
Buy defensive securities
Another strategy that we can use in these summer months is to opt for the more defensive or conservative values of the selective index of national equities, the Ibex 35. In this way, we will be in the best conditions to protect our money faced with the most adverse scenarios for investments. Among other reasons because their prices show great volatility in the conformation of prices. Represented by values of sectors as relevant as electricity or food.
On the other hand, they are usually values that distribute dividends among their shareholders and that offer greater liquidity to the current account of small and medium investors. With a profitability that moves in a range that goes from 3% and up to 8%. Through a payment on account that is fixed and guaranteed every year. Regardless of its evolution in the equity markets. Being in any case an investment strategy that is aimed at the most traditional investors.
Opt for other financial assets
Of course, you cannot rule out targeting other markets and financial assets as an alternative to investing. As for example, it is the case with fixed income markets, which of course offer only one minimum profitability around 1%. But that at least helps to preserve all our savings and that no euro will be lost in the monetary contributions made from this strategy in the very conservative investment. Not surprisingly, the risks are actually minimal since your exposure is simply nil.
On the other hand, another option is represented by alternative investments. As it occurs in raw materials, precious metals and other financial assets of this category. Although in this case, they are more sensitive to the risks of their operations. But in the current ones, they can be a business opportunity because they have a high potential for appreciation, especially gold that shows an excellent technical aspect. With all the constants in an upward trend and that can be the subject of purchases by investors.
Bet on inverse products
If you think that the stock market is going to fall in the summer months, you can lean towards this kind of financial products. But assuming that you take tremendous risks If these conditions are not met and that can lead to large revaluation losses that can weigh down your investments in this period of the year. And therefore it will be a much more thoughtful decision due to the implication of this kind of financial products.
They are models in investment in which you can earn a lot of money, but for the same reason, leave you a good part of the invested savings. While on the other hand, you also have to keep in mind that these products are the ones that present a higher level of leverage due to their special characteristics. Not very suitable for all the profiles that small and medium investors present. Beyond other series of technical considerations. Being one of the most relevant identity signs of these investment products as complex as they are innovative at the same time. It is something that we must take into account from now on.