When should you invest your money in the stock market?

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Comprar y comercializar acciones es una de las formas más efectivas de monetize o invertir ahorros. Pero con mucha precaución debido a que si las cosas salen mal además puedes dejar muchos euros en el camino. A tal efecto, algo muy distinto es la inversión a corto plazo que a largo plazo. Debido a que mediante la primera será fundamental apuntalar inversiones en un uptrend at the chosen value. But that in the end will depend on other factors that can be truly unforeseen. With very negative effects on your income statement.

Sea cual sea el caso, hay un aspecto que tienes que tener en cuenta en las inversiones a corto plazo y que no te quedará más remedio que estar muy attentive to the evolution of prices. Para que en cualquier momento estés en condiciones de deshacer las posiciones o, por el contrario, si se cumplen las condiciones indispensables, incrementar las posiciones. Otro aspecto que tienes que tener en cuenta es la necesidad de liquidez que necesitarás en los próximos meses o años. Debido a que dependiendo de estos importantes parámetros, se verá envuelto en una u otra strategy de inversión.

On the other hand, long-term investments are different in terms of the system you use to make your savings profitable. Not surprisingly, a large part of financial analysts allude to the fact that in these long periods you always get capital gains in stock market operations. However, there are some cases that contradict this idea and there may even be corporate movements that derail their perspectives in the stock markets. Or even the bankruptcy of the listed company itself, as has happened in recent years with La Seda de Barcelona or Terra, to name just a few examples.

What money should you invest?

In any case, the first question you should ask yourself from now on is what should be the monetary support that you should give to these operations on the stock market. Well, in this sense it is not important to emphasize having fixed rules. But it will depend fundamentally on the personal capital that you have accumulated so far. Based on this feature, you should never invest the total of this amount. But a prudent part of it and in any case you always have to have some liquidity in your savings account. So that from this dynamic, you can respond to the expenses that you have to face in the coming months: mortgage payment, children's school, debts incurred and any other that may arise at any time.

On the other hand, you cannot forget that it is very important that you diversify your savings above other considerations. Namely, you should not keep money in the same basket, whatever it is: time deposits, purchase and sale of shares or investment funds. Among other reasons because you can lose a good part of the savings if things do not go as you expected. The money must be distributed among several financial instruments, but that complement each other. In any case, what you cannot do is to contract investment in the stock market with investment funds based on equities. Because at the end of the day you will be investing in practically the same financial asset. There will be practically no difference in the strategies you apply.

Be at the right time

One of the keys to making your investments profitable with particular success is to do it at the right time, something that surely is not always easy to achieve. When it comes to stock exchanges, it means that you need to be positioned in bullish trends at all times. Not surprisingly, you will have all the ballots to get generous capital gains within a few years of carrying out the operation. Even though it is very convenient that you can access the stock markets at the beginning of these movements. Among other reasons due to the fact that it will have a greater potential for revaluation than in the intermediate and final phases of this price training procedure. It is enough to check that international equities have been trending for five years and perhaps now is not the best time to achieve high returns on investments in the stock market.

At the same time, you can also take advantage of certain times of the year to satisfy your investment wishes. Because they are more likely to develop bullish movements than others. One of these examples materializes in the last months of the year since in them the upward movements are simpler to develop, as can be seen in the financial markets during the last decades. It is a moment that you cannot miss to make profitable savings in the shortest term. Not surprisingly, they are very reliable movements that are rarely violated by any other circumstance.

Products to invest

There is another point of special interest and it is the one that refers to financial instruments where you must invest the savings. This investment variable will depend especially on the profile that you present as a small and medium investor. In practice, this means that if you are a conservative or defensive investor, you should not have a very broad exposure to equity products. Although if you are aggressive, there is no doubt that you should invest in buying and selling stocks on the stock market and perhaps even in a format with more risk. As an example, derivatives, warrants or investment in raw materials.

On the contrary, in all cases it will be very useful for you to correctly diversify the savings also depending on the profile you present as a retailer. Through a Securely balanced portfolio of securities and financial instruments and that you can preserve savings above all else. Because exactly this last feature should not be lacking in any investment strategy worth its salt. Beyond other technical considerations and perhaps even from a fundamental point of view. Not surprisingly, it should be one of your priority objectives in all operations, whether in the fixed or variable income markets.

Be in liquidity to protect yourself

If you need to make a good investment, the first thing you should do is protect your money above all else. For this, you must dedicate a good part of your savings to products that offer you a Fixed and guaranteed returns every year. This strategy can be generated in both fixed income and variable income products. Among the first are term deposits, even when at a very low interest rate for the time being. As a result of the monetary policy that is being carried out in the European Union and that has led to the price of money being zero, in other words, at 0%.

With regard to profitability in equities, you can also find a fixed and guaranteed remuneration. This example is embodied in the guaranteed investment funds. Ofrece un interés que puede llegar hasta el 5%, dependiendo del briefcase que compongan estos instrumentos financieros. Hasta el punto de ser considerado uno de los modelos de inversión más efectivos para emparejar riesgo con rentabilidad. Y de todos modos con resultados superiores a los que ofrecen los depósitos a plazo. Con diferencias de hasta cuatro puntos porcentuales.

Too much volatility in the markets

The great disadvantage of being positioned in the financial markets in these times is the high volatility that their positions originate. Of course, higher than a few decades ago and therefore they did not suffer such high oscillations between their maximum and minimum prices. On the other hand, this makes it impossible for you to have sufficient margins to protect your positions from now on. With quite a few latent risks in all the operations that you develop, mainly those destined for the short term, where you are most helpless to protect your savings more effectively.

Only in intraday operations or done the same day you can achieve better results. But as long as you have experience in this type of special operations that require a deep knowledge of the financial markets. Through operations recognized as trading and that go beyond the trend through which the selected securities or financial assets are passing. If this is not your case, it would be better to give up the attempt since you can leave many euros on the way. And therefore, it is not profitable to carry out such characteristic operations.

One of the keys to investing success is based on combining the desire to achieve profitability with the preservation of positions. Without looking at very spectacular gains, as happened in other years in which the evolution of the equity markets was more satisfactory. Because from now on your goals should be much more modest than ever. Stay away from double-digit savings returns, unless you want more exposure to risk. And not all investors can take on this premise.