The performance of financial markets during the first half of this year cannot be considered satisfactory for the investment interests of small and medium-sized savers. The markets harbor far too many uncertainties for savings to feel secure, at least in equities. This has led to uncertainty among savers, who are unsure of where to direct their savings, at least in the short term.
The options available right now aren't exactly plentiful, as you're probably noticing in your own situation. And fixed-income returns aren't meeting expectations , even posing a serious risk to wealth preservation. That's when it becomes crucial to consider where to invest and generate some returns. This article will present the most suitable proposals to achieve this goal, but it certainly won't be easy.
Combining profitability with protecting savings will be even more challenging than in previous years. It will require greater dedication and identifying business opportunities as they arise. Furthermore, it will demand more effort on your part to identify the best financial products available. Many are available, but only a few warrant your attention if you want to maximize your savings' returns. If there's one thing expert analysts agree on, it's that from now on, you'll need to be much more selective.
Looking for the return on investment
Among the most suitable investment strategies for this period of uncertainty, those aimed at achieving a quick return on investment stand out. These are strategies that can perform positively in all possible scenarios , without restrictions. This applies not only to periods of expansion but also recession, and in any type of market, including equities. This approach is considered one of the most interesting and profitable strategies to implement right now.
But then comes the most difficult part: identifying which products possess these well-defined characteristics. Among them, the most suitable for this investment strategy is undoubtedly absolute return funds . Their advantage lies in their wide range of offerings, allowing you to choose from many models with different investment amounts, depending on your investor profile: conservative, intermediate, or aggressive.
This proposal is characterized by its aim to generate profits in all scenarios of the international economy, even when equity markets fall sharply . In many cases, it serves as a safe haven for the market's most defensive investors. You certainly can't expect very high returns from them, but they will at least give you the opportunity to protect your savings against more aggressive products.
If you choose this investment option, you can expect an average annual return of between 3% and 6%, higher than that offered by the main savings products (deposits, promissory notes, bonds, etc.). However, the return is not guaranteed and will also depend on the specific investment model chosen. It is one of the products that offers the best performance under current market conditions.
Virtually all asset managers offer a product of this type, and the differences between them lie in the financial assets included in their investment portfolios. You can even look for the safest options, although the returns will almost certainly be lower and more limited . Nevertheless, they should be included in your investment portfolio for these reasons. In fact, they may even be an irreplaceable option in the current financial market conditions.
Banking products with liquidity
Savings products are not currently experiencing their best period in terms of returns, not by a long shot. This is compounded by the fact that your savings could be tied up for a long time due to the long minimum investment periods these products offer. You'll have to wait until maturity to access your contributions. Given this scenario, a very practical and effective solution is to opt for banking products that offer greater security and, especially, liquidity for your savings funds.
In this regard, one way to implement this strategy is through current accounts that offer higher returns. These can be selected in different ways. The first type is the high-yield account , with returns close to 1,50%, and no requirements to obtain this service. While banks don't offer many of these, you'll have more than one option in the current market to help you achieve your goals without taking any risks.
Another option comes from accounts that, while not offering attractive cash returns, at least help you manage some household expenses. They do this by giving you a small refund on your main utility bills (electricity, water, gas, etc.) . You simply need to set up direct debits for these bills to access these products, and these discounts will automatically be credited to your account, even helping to offset price increases for these energy sources.
And on the other, obtaining a series of discounts on purchases that you can make, mainly in tourist services, consumption, food, etc. And that will help you better plan the budget you have for each month. In addition, these accounts have been developed free of any commission, and other expenses in their management or maintenance. Being one of the most profitable products to face in the coming months, mainly due to the elimination of these expenses in your account.
Detect business opportunities
Financial markets always offer alternative ways to make your savings grow more than other products. You just have to find them and try to capitalize on their movements. Currently, one such opportunity lies in the price of oil. It's developing a strong upward trend that could take it to $60 a barrel , as leading analysts in the crude oil market are warning. And now might be the time to take positions.
If you want to capitalize on these market movements, you might consider investing in one of the oil companies listed on the stock exchange. For example, Repsol, with a dividend yield of around 8%, can protect your savings during the most adverse market conditions. However, for greater security, investment funds based on this financial asset are preferable. These can be complemented with other fixed-income funds , making your market exposure less aggressive.
Finally, there are exchange-traded funds (ETFs ). These combine buying and selling shares on the stock market with investment funds. They are a more flexible product with the significant advantage of more competitive fees than other financial products. And in any case, they could be a solution to your current investment challenges.
Other business opportunities may arise in other financial assets that have been severely punished in recent months, such as commodities, above all others. And there will always be the option of investing in gold , the ultimate safe haven. It has been developing an impeccable upward trend since the beginning of the year, and many investors have returned to it due to the lack of opportunities in other financial markets, including equities.
Gold is also living up to the expectations of major investors. Those who have invested in this precious metal have seen their savings appreciate significantly, exceeding 35%. There are various strategies for investing in gold: stocks, investment funds and ETFs, gold bars, etc., always tailored to your individual risk profile to suit this unique investment.
Finally, there is another option in sectors that can perform better in more negative economic scenarios . These are the most defensive sectors: energy, electricity, and food. They also offer the significant incentive of the most generous dividends in the equity market, with yields very close to 5%. These are very appealing to more conservative savers during times of stock market difficulties.
Some tips to face the investment
To help you carry out this task, you will not hurt at all if you import a series of simple recommendations that will be very useful in the current circumstances of the financial markets. And that would be based on the following lines of action.
- Don't be in a rush to invest, since it will be the market itself that will give you the keys to enter.
- Look for the assets or sectors that they are better behaving During the last months.
- Limit your operations, and do not invest all the money you have available to carry out the operations.
- Try to search alternative models that are giving a better response than conventional investments.
- Do not focus all your savings on the same product, but it will be much better than diversify into several, and even in different financial assets.
- Don't think that stock prices are cheap, because they can still fall more, and as a consequence, acquire them at more suggestive prices.
- And finally, show some caution every time you are going to take positions in some kind of investment, as a strategy to protect your life savings.