It is a strategy that allows users access to a wide range of investment models, but from a single financial product. With the real option of being able to distribute the investment in various financial assets, even from totally opposite natures. With the aim, not only of improving the profitability of the same, but above all of protect savings above all else. Especially when the volatility of the financial markets is the common denominator of their actions.
In this sense, you will surely wonder what are the products that maintain these special characteristics. That is to say, they allow to diversify the investment. Of course, at the moment there are not many models with this feature, but at least there are a few that offer you the possibility of importing this investment strategy. Within this scenario, ETF, Investment funds and equity-linked deposits make it easy for investors to adapt to all financial markets. It may be time to take positions on some of them from now on.
In this way, and as an example, the fixed income can be complemented with the variable within the same financial product. One of the most notorious cases is represented by investment funds and very specifically with mixed funds that allow you to invest money in various financial assets without having to change the product or savings model. In this way, you can even save more money in managing them. Both in the commissions and in the expenses of its maintenance and to the point of having more euros every year in your checking account.
Diversify in the stock market, is it possible?
If there is a strategy that provides greater investment security, that is none other than diversification. Wouldn't it be better to open up to new markets than to limit yourself to what a single stock, sector or stock index does? This problem is solved through a more open management in the financial assets contracted. To the point that from the same product, positions in equities, fixed income or even alternative models from various economic areas of the world can be opened. This is basically diversification in investment.
The problem for investors lies in the fact that very few products know how to combine these financial assets. Not surprisingly, the usual thing until a few years ago is that each investment model covered a specific financial market, whatever its nature. This trend has changed substantially and at the moment it is possible to group several of them in the same product.
Simplify operations
Without the need for the user to go to different investment formats to satisfy your needs. Not only will it allow you to spend more time searching, but it will also increase the commissions and management expenses that your hiring entails. Therefore, it is time to detect which are these financial products that allow a more flexible management of savings.
Under these characteristics, investment funds stand out due to the special nature of their models. Through mixed funds, the investment portfolio is allowed to adjust to the profile of its holders. In this way, they will be able to increase their composition through fixed income or monetary assets for a defensive profile. Or on the contrary, influence equities to modulate more aggressive approaches.
Advantages of diversification
One of the advantages provided by this financial product is its variety to integrate investment models from the same portfolio. For example, stocks, currencies, bonds, warrants and current account yields. There are practically no limitations regarding the objectives pursued by the funds. On the other hand, their diversification not only affects financial assets, but also the geographical areas where they are listed: euro zone, emerging, global, etc.
As a consequence of the special characteristics of this product, an aggressive investor will opt for 80% equity and the remaining 20% fixed. While a moderate profile will vary the percentages under the contrary trend, even opting for a part of the savings to the money markets. There are many alternatives that you can choose if you follow this investment strategy, such as diversification of invested savings. Of course, many more than through other more complex investment systems.
Opting for exchange-traded funds
ETFs, for their part, base their proposals on a global exposure to various sectors or stock indices, by replicating these reference sources of financial assets. Why choose only the shares of a single company when you can cover several? This is one of the main objectives of exchange-traded funds. In any case, one of its effects is that the risks of investing in a single capital destination will be minimized. Something very to take into account if you want to protect the capital invested in each of the operations.
In addition, they present several, and diverse nature, alternatives where to make profitable the patrimony. Ibex 35, CAC 40, Dow Jones, Sovereign bonds, raw materials and precious metals, among some of the most relevant. On the other hand, its structure is already diversified as it is a financial product that combines operations on the stock market and investment funds. In all cases, it allows you to take advantage of the upward trend of a large part of the financial assets that are listed on the markets. But without having to select a single investment route where the risk is higher.
Also for traditional products
On the other hand, this strategy can also be reached from the more traditional banking products. It is the case of term deposits linked to equities. Either through a basket of shares or through a portfolio of investment funds. It consists of a part of fixed income that is what guarantees a fixed return on savings, although under minimum percentages that are in line with the value of money at the moment.
While the remainder - that is, the one linked to the stock market - is that which allows the yield to be improved upon maturity. But unlike other financial products, without assuming any kind of risk. Because in all cases there will always be a return to savings. Its distribution is equitable for both formats, half for each investment model and without the possibility of varying it. It is a very original way to diversify investment without excessive problems and which can be accessed by a good part of small and medium investors. Not surprisingly, the risks are really very controlled and it is more complex to generate very large losses, as happens with other types of financial or banking products.
Advantages of your application
Of course, diversification brings a series of benefits that you should take into account from now on. Among other reasons, because it will help you reduce losses in the most unfavorable moments for the equity markets. Or even also for investments considered as alternatives that require greater care in their management and maintenance. Through the following guidelines for action that we are going to present to you below.
- It is a very effective system that although it will not make you a millionaire, it will at least protect you from most vulnerable scenarios for equity markets. As for example, it happened in the hardest moments of the economic crisis, back in 2007 and 2008.
- It allows you to invest the money in several financial assets at the same time and without giving up any investment model. That otherwise, you would have more complicated access to make the personal or family assets profitable. It is also an investment strategy that is adapted to all user profiles. From the most aggressive to the defensive or conservative cut, without any limitation.
- Diversification is continuously advised by financial analysts around the world who see a very positive model for you to get your goals in a safe and effective way. Above other technical considerations and maybe even from a fundamental point of view.
- With its application you do not give up anything in the world of investment. If not, on the contrary, you can open yourself to new business opportunities that have not yet been explored by you. Both in terms of equities and fixed income or even from very original alternative formats.
- This investment model can be used in any economic scenario, whatever it was. As a great advantage that you can import to design your investment from these precise moments. With a wide range of combinations that you can use at the time you consider appropriate and that can make you improve open positions in the markets.