There are just a few weeks until a new year 2017 is installed in our lives. And from the investment point of view, there will be many hopes placed in this year that is about to begin. Especially having endured 2016 with a lot of resignation, since it has not been a good year for the markets equity, and investment in general. Where only at the end there has been a small bullish reaction.
The arrival of a new year you have to consider it with some enthusiasm and that you will be able to monetize savings with higher returns than those obtained in the last twelve months. To fulfill these wishes, it will not hurt to write a letter to the Magi where they state your wishes. Not only for the equity markets, but all in general. It will be a brilliant initiative to start the year with some enthusiasm.
There will be many wishes you want for this new exercise. Try to make this actual missive a bit unrealistic so that you can be satisfied at some point. It will cost you nothing and will help you face the next few months with renewed optimism. Are you willing to accept this suggestive and original challenge? Just in case, we are going to help you prioritize a few wishes in this letter full of illusion.
Desires: stability of the markets
Without a doubt, it will be a priority that the financial markets show a good dose of financial calm. For this, it will be necessary that situations such as the one that occurred this summer in Great Britain with Brexit or the departure of the community institutions do not arise. If this happens, you will have much easier to generate capital gains in your operations in the financial markets. But it won't be enough. You must not forget in this letter of illusion a plea so that the growth in major economies the world is a reality. It could be the trigger for a bullish break in the stock markets.
With these two important requests, and if they are fulfilled, you will have a very favorable scenario so that you can open positions in equities with greater guarantees. With the real possibility that at the end of 2017 your checking account balance has increased substantially. Spiced with a greater adjustment in the accounts from some countries. News that is always well received by the markets, and of course by investors.
Nor can you forget about the elimination of tensions between the members of the European Union. It will be another guarantee for the stock exchanges of the old continent to have a longer journey from January. Perhaps under greater proportions than you imagine right now. That is why this review should not be missing in your letter to the Magi.
What will 2017 be like for your investment?
One of the biggest enemies of equities is the conflicting scenarios. Especially what they have to do with attacks, terrorism and similar acts. Con are good companions for the evolution of companies in the financial markets. Until the point that they generate serious decreases in all values. Each time one of these responses occurs, they will generate significant losses in your investment portfolio. Whatever its composition.
If you want to make the savings profitable during the next year, you will have no choice but to ask that this new exercise be exempt from these scenarios. In this way, there will be no surges in the stock indices that could harm your positions in equities. It will, therefore, be a stability factor that will influence the share prices to rise with greater guarantees of success.
A good number of analysts in these markets are asking the new to be free from these unpleasant events. Despite them, there is a small group of stocks that react upwards when terrorist attacks occur. Among those from the security, arms or military products sectors. It is the only exception to a general trend in all markets.
Absence of conflicts
But if there is currently a variable that can affect the equity markets, that is none other than the monetary politics that lead to both sides of the Atlantic. Without a doubt, it will be the most important element for bags to take one trend or another. After having maintained interest rates at some of the lowest levels in recent decades. And the fear that some investors have is that this trend may change as of 2017.
With regard to interest rates in the euro zone, all perspectives seem to be on the path that everything will remain the same. With the price of money at 0%. This would be good news for equity markets and investors. Any change would be taken with a serious disappointment, and therefore with depreciation in most of the stock market values.
Another scenario is that presented by interest rates in the United States. After many years at record lows, this year the monetary authorities have decided upload them little by little. As a consequence of the better evolution of the North American economy. They have raised it timidly, around half a percentage point. However, a further cut to them would have an adverse effect on financial markets. Where the sellers would clearly prevail over the buyers.
If you want to follow a very effective strategy in the stock market, it should be guided by monitoring interest rates. If everything continues as before, it will favor opening positions. While any change in the outlook will be the trigger for significant falls in equity markets. To the point that you will have to abandon all the positions that you have opened up to now. It will be the best way to protect yourself against unexpected movements for investors.
Doubts about the Spanish economy
If your intention is to invest in the national stock market, do not doubt that you will also have to add the good evolution of the economy to the wish list. Especially in a year of many doubts regarding the government capacity to face the main problems that the country has: unemployment, budget adjustment, pensions and wage increases for workers, among the most important.
We will have to be very expectant about everything that may happen in Spain during the next twelve months. Because depending on this variable, the stock market may take one or another very different path. Without forgetting the political uncertainties which may also influence the evolution of national equities from now on. It will be one of the points where you should look to make the savings profitable.
Nor can you forget the problems that some national companies may present. With bigger problems in their businesses than can be foreseen at the moment. The business results that are presented each quarter will be a good thermometer for you to detect this possible scenario. They will give you the odd clue as to where the shots can go in this regard. You should not neglect this aspect but you want to take more than one negative surprise during the next exercise.
Be very careful with the banks
The year 2017 will not be complete for your interests if the problems in the banking sector are not fixed. Especially the one that has to do with the entities of the old continent. The latest news on the sector is not very encouraging. To the point that it cannot be ruled out new interventions in the odd bank. With special attention to the main bank in Germany, and whose situation is very worrying.
So that you do not have many problems in equities, you will have no choice but to refrain from opening positions in this important financial segment. At least until the main problems they have been living with in recent months are solved. You have other sectors in the bag that are safer. With an equation between return and risk that is much more attractive to your interests. Among them, electricity, new technologies or food companies.
If all these wishes are fulfilled, you will have less complicated to make profitable the savings, and perhaps even more than expected. To do this, it will be necessary to analyze what is the evolution of the financial markets during the first weeks of the year that is about to start. Not in vain, they will give you the first clues that help you make the most correct decision based on the scenarios that may arise.
Nor should you minimize the markets' reaction to new US tenant. Without forgetting that the first year of all mandates is not usually very positive for small and medium investors. It is a data that rarely reaches savers, and that can be decisive for your interests.
You cannot forget, on the other hand, that also during this exercise general elections will be held in countries of great specific weight in the world order such as France and Germany. We will have to keep one eye on Berlin and another on Paris, for what could happen in these important electoral processes. Equity markets are sure to be highly volatile in the weeks leading up to this political event. With many trend changes based on previous electoral polls. You cannot forget this scenario if you want to be successful in trading.