There are many small and medium-sized investors who have a certain fear of entering equities for the risk of their operations. But what is really true at the moment is that the most problematic investment is in bonds. To the point that more than a few financial analysts are warning of an important speculative bubble on this financial asset. From this scenario, there will be no choice but to reduce any positioning in this product originated from fixed income.
It is a scenario that is repeated by an increasing number of experts in financial markets. To the point that they see in the bonds a problem that could lead to investors in the coming months. Because indeed, if there is a danger in the financial markets at the moment, there is no doubt that it comes from bonds. It is said that a relevant crisis around one or two years. Where the most important thing for small and medium investors is to be alert to what may happen. Not surprisingly, a lot of money is at stake.
Even the former chairman of the Federal Reserve of the United States, Alan GreenspanHe is very clear about it, pointing out that the main problem for financial markets is not in the stock market, but is fixed income. On the other, he has even affirmed that it will be necessary to be especially cautious in the positions taken by savers at the moment when the bonds finally explode. It is a clear warning for sailors from which you can get more than one lesson on the strategies that you can import from these precise moments.
Possible bond collapse
Of course, one of the roots of this problem lies in the maintenance of low interest rates in the long term. Generating a truly unsustainable situation for the financial markets and that will lead to the fact that when they decide to go up, they will do so faster than normal. Something that is understood by a good number of market analysts is not discounted by financial agents. With the possibility even that there may be a collapse in the real value of bonds. With very serious consequences for all investors who have their positions open in this important financial asset.
From this general scenario, it cannot be forgotten that international equities may also suffer from this moment in particular. Although with a nuance that should be clarified properly. It is none other than that investors will be able to justify the fact of keeping the financial asset whose price is less overrated. In this sense, the outlook for equity markets appears to be less catastrophic from the point of view of outright investment. It is something that must be valued from now on if you want to hire a product to make the savings profitable in a more optimal way for the interests of investors.
Exit from the stock markets
In any case, the opinion of the most famous financial analysts goes in the opposite direction. That is, if this scenario really occurs where interest rates begin to rise, the most sensible thing to do is get out of the bag as quickly as possible. Because the effects can be overwhelming for open positions in these markets. The alerts in this financial asset are happening in the last dates. To the point of considering the bonds more dangerous at the moment than the stock market itself or other alternative options of special aggressiveness in its contents.
From this perspective offered by financial markets from now on, it is time to reflect on what is happening with this financial product with such special characteristics for small and medium investors. Because in effect, as Alan Greenspan explains in his latest articles in the specialized press, “the real problem will occur when the bond market explodes, as long-term interest rates will rise ”.
But it goes even further by noting that they are heading towards levels of stagflation never seen in previous years and even decades. With a very clear and defined diagnosis on the different financial assets and that this situation will not be positive for any of them. It is a scenario that you must have to plan your investments from now on. Not surprisingly, it can bring you more of a negative surprise after the return of the holidays. At least it is a scenario that you must count on to more effectively manage the savings accumulated up to now.
What to do with the bonds now?
Of course, you should take into account this new situation that financial market analysts have been warning about. Because if so, you will have no choice but to restructure your investment portfolio, but with the utmost urgency. Because from now on there may be more you can lose than win. You will have no alternative but analyze where you have invested your money and adapt it to the new economic scenario that may arise from the next few months.
For everything to develop correctly, you should not leave anything to improvisation. Not surprisingly, you cannot forget that your money is nothing less than what is at stake. And you will need one planning in all your investments. Not only in those from variable income, but also in fixed income and even in other alternative models of approaching investment. It will be the best strategy you can use to protect your assets with greater guarantees of success. And what better way to do it than by starting to develop it right now. Are you in a position to take this first step?
How to protect your contributions?
In any case, a series of guidelines to follow will never hurt you. Because in effect, they will be very useful to defend your interests as a small and medium investor. In addition, they may be complemented with other additional actions that will be aimed at improve return that you can get to your savings. Because even in the most unfavorable scenarios in the world of money there are always business opportunities. And you must be willing to accept these challenges generated by the different financial markets.
For all this to be fulfilled with great fidelity, nothing better than importing a battery of small tips that will give greater security about the open positions in any financial asset. And that are basically reflected in the following lines of action that we will expose you below.
- Try to reduce your exposure to bonds. If you want, it doesn't have to be radical, but progressive. Until it reaches a point where the presence of these financial products is practically negligible. Or at least with very little presence in your investment portfolio. You will have gained a lot of security with the application of this unique investment strategy.
- Right now, it can be more profitable, and provide more security, decant the savings towards the different products of the variable income. They are less likely to develop severe falls as predicted by some of the most famous analysts of the financial markets. Although always with a remarkable control over all the operations that you carry out from now on.
- El monitoring of financial markets It should now be much more comprehensive than it was until a few months ago. You cannot forget that the speed of operations will be very important to your personal interests. A difference of a few hours can mean a significant amount of money. That you may well lose, but on the contrary you can also win. It is worth it that you are very careful to respect the times.
- It is a very suitable time for you to use protection measures. Because at the end of the day they will be the ones that get you out of more than one scare that the financial markets can provide you. They are of a different kind and nature and it will not cost you anything to put them into practice. Especially in an economic scenario as worrying as the one that is coming. At least from next year, some analysts warn.
- Another strategy that can be used is to apply powerful information filters. So that in this way the best decision can be made at all times. Even with the convenience of diverting savings to other clearly alternative financial markets. It will be one of the most successful outings if the most negative scenario of all occurs.
- On the other hand, you will always have the opportunity to close all or some positions open in financial markets. Especially when the symptoms that they give are not the most optimal to continue with the investments. It can be a perfect excuse to rest for a few months from this special task that you dedicate yourself to.
- Finally, it cannot be forgotten at any time that in the diversification of your investments may reside one of the most effective keys to protect all your positions. It does not matter the financial asset on which the financial products that you have contracted are based until those precise moments. Because what it is about is to eliminate unnecessary risks from any investment approach.