These funds allow clients to take advantage of the growth potential currently offered by the stock markets, without risking their assets. Being able to obtain in most cases revaluations through a wide selection of products based on any equity market, both national and international and, in which the emerging ones stand out for their novelty. This is another option you have on hand to invest your savings in the equity markets.
In any of the cases, the alternatives to opt for a fund of these characteristics are very wide, from those based in emerging markets to those that base their investment in the most suggestive international markets for each moment such as North American, European or Japanese, logically passing through those of a national nature. There are no limits as to its origin because the management companies have made a wide range of models with these characteristics. Even the most original places you can imagine, such as the African bags.
They can be subscribed from 500 euros, but the most important thing to take into account is that –unlike investing directly in the stock market- they have a suggested minimum term of permanence that can be increased up to 3 or 8 years, for which it is a class of investment aimed at the medium and long term. It is a very effective way to invest in these financial assets without going directly to the stock market. By means of a financial product that can be combined with another series of financial assets of different nature and condition.
Investment funds in the stock market: in favor
One of the main contributions of mutual funds in the stock market is that you do not have to worry about their punctual monitoring since they are not speculative operations. If not, on the contrary, they require higher terms of permanence, between 2 and 5 years approximately. Although it is also true that you can cancel them at any time without the application of any kind of commissions or penalties, just as it happens in other kinds of financial products. In this sense, it can be said that we are facing a more flexible investment product or model than the rest.
While on the other hand, this class of investment funds are characterized above all because they do not invest your money in its only value or stock index. If not through a basket of these financial assets and that helps you better to protect and preserve the capital invested from the beginning. Also, you can't forget that his better behavior It is for several years, and therefore they are not suitable for short operations. Not much less. It requires that the investment be settled for several months so that its profitability is really what is desired by small and medium investors.
Good level of liquidity
One of the main advantages of investing in mutual funds is their liquidity, since despite the fact that many of them have a suggested minimum term of permanence, it is normal that whoever hires it can also have the capital invested immediately, around at 24 and 72 hours deadline, as stipulated by law and, depending on the type of term. They are also distinguished by their diversification, since the contributions made by the client are added to those of other investors who have had the same idea and who affect the formation of large capitals that have an impact on improving the diversification of investments.
Another aspect that must be assessed is security since the investment fund management entities are supervised by bodies that guarantee their proper functioning. And, finally, the professional management of the fund management entities that allows them to carry out a highly professional management, designing products for each moment and destined for each investment profile, avoiding the investor the selection process. In this sense, it can be said emphatically that investment funds based on the stock market are a safe product and that they cannot give you a series of additional surprises during the permanence in the product.
Disadvantages of these funds
While on the contrary, it also contemplates a series of disadvantages that you need to know from now on. One of the most relevant is that which has to do with the profitability of financial markets. In other words, it does not include all the profitability space that can be produced in the equity markets directly. From this point of view, your interest will be lower than from the purchase and sale of shares on the stock exchanges. As in the opposite direction, that is, the losses will not be as pronounced than from the other option. Being one of the hallmarks of this kind of investment.
Another of its relevant aspects, in the negative sense, is that which refers to its commissions can be more expansive than investing in the stock market. Among other reasons because there is not a single commission, but on the contrary there are several and among which those of management and deposit stand out, which cannot exceed 3% and in these cases are mandatory. On the other hand, there are other fees that are optional and that can make the product more expensive by between 1% and 3%, although they generally come from stock-based investment funds by international managers. Being another of the hallmarks of this class of investment funds.
They bring together various financial assets
Another of the common denominators of these investment funds is based on the fact that it provides several financial assets with the same characteristics. With a diversification on investments and that is one of the points of reference to better understand it from now on. Like your better performance in the most unfavorable scenarios for equity markets. Where the real profitability must be directed to several years ahead, and this is an aspect that tends to mislead a good part of the holders of these financial products, since its real calculation is more complex during the permanence stage of this class of investment funds. .
On the other hand, another of the most negative elements is the one that has to do with on certain occasions they take positions in financial assets that are very little known by small and medium investors. From this approach in stock investment, it should be noted that at this time these funds can be considered as a very conservative option which is adapted to all user profiles. Without having to provide special conditions in their level of learning. As another element that differentiates it from the more aggressive financial products.
Investment diversification
One of the effects generated by this class of investment funds is that they diversify operations in the equity markets. Because in effect, it is an option to preserve savings over other series of technical considerations. Where it is noteworthy that this diversification what generates is that you do not lose money in a single financial asset. It is an investment strategy that is especially favorable in unfavorable scenarios for equity markets. Among other reasons because they will help you achieve the objectives pursued by small and medium investors.
In this general context, nothing better than distributing your money in various stocks, sectors or indices of the stock exchanges around the world. Coming from various geographical areas, from the most traditional or conventional to other markets that may be stranger to you from now on. Because what it is at the end of the day is that not all the money is deposited in one place. Not surprisingly, this is one of the main characteristics of investment funds that present this special hallmark. Both in national markets and outside our borders. Here is the secret of this investment strategy.
While finally, you only have to choose the fund model that best suits your profile as a small and medium investor. From that moment on, try to make the capital invested profitable with the maximum security guarantees and, if possible, with a more than important return on savings. In this sense, it can be said without fear of being wrong that these financial products are these bullish moments in the equity markets, but if for any reason you do not want to take risk, you will have no choice but to combine it with other assets from fixed income. In what constitutes investment funds of a technical nature and that is another of the options that you can take advantage of from the moment and with less risk in operations.