There are more and more voices that comment that it will be necessary live with terrorist attacks from now on. Not surprisingly, it is a hidden war which is completely alien to all those that have developed up to now. Unfortunately, these opinion-makers warn, there will be no choice but to become aware of this new scenario that is presented in the Western world. And that will undoubtedly have its logical impact on the equity markets.
This is one of the approaches that small and medium-sized investors must assume from now on. As is happening with the terrorist attacks that are taking place in much of the industrial world. To the extent that it can be decisive so that you can build your portfolio looking forward to the next few years. In particular, with the short and medium term periods of permanence. With some stock market sectors very sensitive to this terrible news that is happening in the old continent and even in the United States itself.
So that you can optimize your savings with greater success, you will have no choice but to import new guidelines of actions to make investments more flexible. You cannot be static in them because it will mean unexpected losses every time some of these negative events occur for everyone. Not surprisingly, you should be more agile than ever to enter and exit the financial markets. Because in effect, these operations will require the fulfillment of times that were not necessary before.
The attacks scare away tourism
Undoubtedly, the securities of these relevant sectors will be the most problematic to take positions if attacks of these characteristics take place. Among the companies in the tourism industry that are listed on national equities, the standout NH Hotels and Sol Meliá as regards the hotel segment. But also air lines such as IAG or tourist platforms such as AENA or Amadeus in the specific case. All of them are not the best options to be represented in these periods of social instability and exceptional violence.
A good part of these stock values have been the ones that have controlled these falls the worst, ending with more than important setbacks. To the point that the correction of their prices can become an entry point in the financial equity markets. As a result of the very competitive prices they present facing the intentions of small and medium investors. Because in effect, these movements do not have excessive travel in their falls at this time. But on the contrary, they are punctual and rather limited in almost all their performances.
Other segments affected
Of course, there are more business sectors that can harm your interests with the world of money. To the point that it can create some other problem from now on. As a consequence of these terrorist attacks that are devastating many countries in the northern hemisphere, including Spain. You cannot forget, therefore, that you should not take positions in these proposals on the stock market. Both national and from other geographic areas. One of the most relevant for close the positions are those of the banking sector for its special characteristics in these moments.
Because in effect, financial groups are also vulnerable to this kind of terrorist attack. As a consequence of their perception that the level of economic growth in the main geographical areas may be affected. Furthermore, the fact that the world of money is always afraid in the most unfavorable scenarios for your interests. And this of course is one of them, because it does not even help optimism to be the common denominator among the different financial agents.
Worst performing stocks
On the other hand, the most aggressive stocks in equity markets also stand out. The reason for this performance is because their reactions are always worse than the rest of their competitors. As for example, in energy companies, highways or focused on food segments. Because their behaviors are generated from much more volatile movements. Where the differences of the maximum and minimum prices in the same trading session are very wide. They generally contemplate gaps that can approach the 5% level and even overcome them with some sufficiency.
One of the clear examples of this scenario is represented by the values linked to new technologies. Where every time one of these attacks happens, the corrections that occur are of greater intensity. Without there being a very clear cause and effect on the irruption of these very violent movements in the financial markets. With e-commerce, internet, new communications or starp up companies as the main champions of this trend. Where the best you can do is be absent from their positions from now on.
Peripheral bonds: greater weakness
The consequences of these terrorist attacks are not limited only to equity markets. Of course not, as bonds are also vulnerable to weakening their positions in these less-than-optimistic investment scenarios. From this scenario, peripheral bonds are the most likely so that you can lose money from these precise moments. There is a reason that supports this trend and it is because they are the weakest products in the financial markets. Investors quickly undo their positions to go to the savings models that offer greater security at those times.
Therefore, it will not be the time to stay in fixed income that is more sensitive to generating losses during stressful days. Among others the Spanish, Italian, Portuguese or even French bonds. On the contrary, you should opt for products that serve as a refuge for the arrival of new monetary flows. In this sense, a good example of this very special strategy is represented by US bonds. But especially for the Germans since they are the best behaved in the financial markets during those days so atypical in the valuation of prices.
Of course, you will have no choice but to opt for a very flexible and active investment portfolio. Much more than at other quieter times of the year. So that in this way. You can adapt to the different situations that financial markets present. Without any kind of limitations with respect to the operations that you are going to take at the precise moment in which these unpleasant events for all develop.
Reduce positions in some funds
The management of investment funds will also be very important in these moments of great doubts about where you have to place your savings. Because in effect, you will have to reorient your portfolio based on these financial products. Where the main thing will consist of direct them to the safest funds in every moment. As for example, those based on mixed formats, monetary or even with the most defensive financial assets. In all cases, less punished by the effects of Islamist terrorist attacks anywhere on the planet.
Another aspect that you must assess from now on is that which has to do with the management of the investment fund itself. Because in effect, you will have no other options than to opt for the active formats over static ones. They can generate that you can even make the savings profitable with the development of these events. Although with the clear disadvantage that you will have to be in a great hurry to redirect investments. Adapting them to the new circumstances on which the financial markets will depend.
Guidelines for action
Either way, it will always come in handy for you to import a series of strategies that will be very beneficial for your operations in the financial markets.
- Stick to the investments that better behave in these special settings. It will be the best proposal to improve your movements.
- A very simple option is to opt for the more defensive values and whose behavior is better than the rest.
- If you have to undo positions, do not hesitate to exercise this alternative to protect your interests in the markets.
- You don't have to limit yourself to equity markets. But also the fixed ones may be more profitable or even based on currency exchange.
- Nor can you forget that the effects of these events they usually last a short time. For this reason, your operations must be especially fast.
- In all cases the values of the tourism sector they will be the most affected in the movements in their price. Stay away from them so as not to get more than one surprise at those precise moments.
- Another strategy you can use is to wait for check the intensity of the falls. Because it may not be necessary for you to undo your positions because they will soon regain their previous price level.
- Either way, it is a scenario to which you will have to get used to unfortunately from now on. Perhaps with several of these undesirable performances throughout the year.