When stocks fall or are simply subject to greater volatility in their prices, you can become desperate from an investment point of view. Good because your alternatives to make the savings profitable or simply because you are very afraid of losing a good part of the savings accumulated during years of work. But the arrival of new approach to equities It has led to this ceasing to be a problem for promoting investment. It can even mean new business opportunities that were completely unknown to you until now.
Because in effect, you may not know it but for several years you can also make your savings profitable through the most unfavorable scenarios in equities. Even with more attractive percentages for your personal interests. Generally through certain financial products, but they are forgetting about the most sophisticated ones. For example, derivatives, futures or options among some of the most relevant. So that from now on you have no more excuses for not investing the available capital. Even in the most negative scenarios for equity markets.
New expectations are opened to you in investing that you cannot miss under any circumstances. In many of the scenarios, it will be new forms of investment with which you were not used to operating. You will therefore need an apprenticeship to understand these financial models. And why not, also a higher dose of financial culture. Because they require special care in their operations. Be an aggressive or more defensive investor. In any case, the experience will be an added value to undertake these actions in the equity markets. Are you willing to set yourself these goals?
Volatility in stock indices
One of the strategies you have is directly through the purchase and sale of shares. How? Well, very simple, choosing a series of stock indices that are based on this important characteristic of the financial markets. For them you have the odd proposal to satisfy your wishes to make the investment. Because in effect, the equity markets have enabled this alternative. From approaches, yes, more complicated than in another class of more conventional operations.
One of these initiatives comes from VIX volatility index. Its way of working is based on the fact that its behavior is completely inverse to that of the stock indices. In other words, if the stock market rises, this index does the opposite, that is, lower. And for the same reason in the opposite direction as well. In short, it goes against the tide of the evolution of equities. So that in this way, you can also make the most of this scenario that can occur at any time. Even within a few days.
It is true that you are facing a significantly more complicated investment system. To avoid these problems, you have other much simpler options to invest your savings in volatility. As in the specific case of the index Nikkei Volatility. Through this investment model you can do it directly and without any interference. The main problem in opting for this proposal is the fact that it is a market very far from your natural zone to open positions in equities. And perhaps what is worst for your interests. It is nothing else that has significantly more expansive commissions that will make operations more expensive. But at least you will have an echo to this very special demand that is represented by the volatility in the financial markets.
Investment funds as allies
But if there is a product that can follow this original philosophy, that is none other than investment funds. But as long as they are based on the volatility of any financial asset. Not just from the bag. But also of other alternative markets such as those of precious metals, raw materials and even real estate and even currency. There are no limits to its expansion. As a consequence of the innovation that has been developed in recent years in the different financial products. Including the bag itself as you can see from now on.
If you want to hire a fund of these characteristics, you will have no problem meeting the demand. It is true that they are not abundant, although each time the managers are attending to this need of investors. With funds that are highly specialized in different financial assets. From the stock market to precious metals or the currency market. These are investment models characterized by the fact that they are intended for not very long terms of permanence. As the main difference with respect to another class of these financial products.
Their hiring does not entail additional expenses, not even much more expansive commissions. But on the contrary, they are governed by conditions typical of investment funds. The only difference is that in these cases you can benefit from volatility in the financial markets. Although if it does not occur, you can generate serious falls in your financial contributions. Not surprisingly, it is one of the risks that you must assume when formalizing them from now on.
How to take advantage of it in the stock market?
If, for any reason, you cannot or do not wish to subscribe to the financial products mentioned above, you have another alternative. Although somewhat rudimentary, it is very useful to benefit from these special and atypical situations. It is something as simple as buy actions in the bags of the proposals that best perform in these situations. Because in fact, there is always one values more sensitive to these movements in the markets. It is to them where you have to go to import this investment strategy.
Of all of them, it is the defensive ones that best meet your expectations. Above other sectors that are more cyclical or that follow the pattern of the most representative equity indices. From this point of view, electric companies can be a good choice. Their prices will be less vulnerable to market shocks. Where you can even collect a fixed and guaranteed dividend every year. With an annual yield that can rise up to 8%. Forming a fixed income within the variable.
Another of the sectors in equities that is most vulnerable to your operations is the one that has the food companies as the center of your business. They develop movements similar to electricity, with little propensity to generate very violent impulses in the quotation of their prices. They can also be used to import these strategies that are closely linked to the volatility of the financial markets. In addition, it has a wide representation of these more defensive proposals on the Spanish stock market.
Credit sales, with more risk
You have in these more sophisticated products another of the tools to develop your investment strategy. Under very special approaches that differ from other financial products. If you think that a security or financial asset is going to lose profitability during the next few months, this may be an opportunity to do business. Because indeed, credit sales pick up this trend with special intensity. More than in other investment models. But there are also many risks that you can contract with its operations. Not in vain, if the investment is not developed according to your expectations, there are many euros that you can leave on the way. More than you initially think.
Because these are very aggressive operations that require greater experience and knowledge of the financial markets. They are products, therefore, that they are not recommended for any investor profile. In addition, they have a little more complicated mechanics that can lead to you not understanding how you should operate with credit sales. This is one of the main drawbacks you have to face in these situations.
For you to understand better, credit sales allow you to accumulate more capital gains as the price of the securities depreciates. The more it is, the better it will be for your checking account. It is one of its most relevant characteristics. Therefore, they are designed for very fast operations where you have very well defined objectives. They are not used to experiment, or even to try your luck with them. Since the effects can be devastating for your personal interests.
It is one of the strategies most used by the most speculative small investors in the financial markets. For a very clear reason and that is none other than the possibility you have to earn money in a short space of time. Due to this peculiar characteristics they have become very popular among the most seasoned retailers in relation to the world of money.
As you may have seen, you have more than one alternative to invest in volatility. Although they will not be easy operations, far from it. Not surprisingly, they will require more experience from you than through other financial products. It is the toll you will have to pay for accepting these less conventional approaches. Although the reward may be greater if this more complex scenario is met in equities. Are you willing to take it? If so, exercise extreme caution and a great discipline in operations. It is the best way to achieve your final goals.