In the current economic situation, the decisions of the central banks of the main productive areas of the world take on greater importance. With great regularity in the movements that have been caused as a result of the intentions of those responsible for monetary policy. To the point that they can make you win or lose a lot of money in the operations that you formalize from now on in the main financial markets. That is why it is very important that you be very attentive to its evolution in the short and medium term.
From this general scenario, there is no doubt that interest rates will be a more than relevant factor for you to develop your investment strategies. Above another kind of analysis, both in the technical relationship as fundamental. For this very reason, you will have more than one reason to control your investment portfolio. With some values more sensitive than others to take charge of these movements in the price of money. Either way, put yourself in the worst case scenario, because all predictions are in the direction of an increase in interest rates.
Types: why are they decisive?
When it comes to US financial markets, things seem clearer than in Europe. It is not surprising that it is not surprising that all this is going to be a consequence of the policies of Donald trump they will see each other next year. Given this complicated scenario, there will be no choice but to be prudent with certain American values once again. They can generate more than one negative surprise from these moments. Because one of the biggest fears gripping small and medium investors is that the general trend of the markets in this economic zone could be reversed at any time. As we have warned you from this medium.
Low interest rates are always much more beneficial to the equity markets than in the opposite trend. For reasons already explained in previous posts. By this this explanation any Change of trend they can impose short positions on buyers. Whatever the case, it will be the perfect excuse for you to abandon your positions if you are invested in the financial stock markets. It may be the most effective strategy to defend your savings more strongly in your strategic approaches.
Another very different thing is what is happening in the types of the old continent. Where truly anything can happen. The reactions that financial markets generate from now on can be unpredictable. A little protection will never hurt you to develop any kind of strategies. Even though everything seems to indicate that the rate hike will be in the medium term. But not during the next few months since the same trend will continue as up to now. In other words, with a very cheap price of money, in a historic 0%.
What sectors are the most vulnerable?
It is, therefore, a sector to which you should pay special attention from now on. With a rising potential possibly powerful if this scenario is reached with euro zone rates. In fact, at the moment they are quoted in the markets very solidly. Above other sectors of special importance that are lagging behind the most important financial groups in the country.
In the opinion of equity experts, there is a select group of banks that many like and can be the object of their purchases from now on. In this regard, the banks that analysts like the most are BBVA, Bankinter and Bankia. Both in terms of its results and its arguments. The second of them is the clearest bet on the part of financial intermediaries. To the point that they may also be the ones who best make a more premature decision about a change in the trend in the evolution of interest rates.
Other sectors benefited enormously
In some cases, they are even listed at a certain discount from the indicative price given to them by financial intermediaries. With potentials that can reach up to 25% in the most favorable proposals for your interests as a small and medium investor. It may be a possibility to open positions in some of these securities and include them in your next investment portfolio. To the detriment of publicly traded companies, they are less likely to develop hikes after interest rate hikes.
What are your performances?
But what really matters to you is how you can take advantage of this new losing scenario to present the economy of the old continent. Even when for them it is necessary to modify their equity strategies, sometimes in a much more aggressive way than usual. You will have the odd clue about what you should do through the intentions expressed by its director, Mario Daghi, in the next meetings of the ECB. Where doubts exist, some news may appear about your actual monetary policy intentions. With which you will be able to apply some strategies in your stock market operations. Here are some of them,
Strengthen your positions in sectors most benefited by the rate hike. It will be the most effective measure you can apply in the financial markets from now on. Where, it will be of vital relevance that
Show a greater caution with your operations in equities, because in general a rise in interest in the markets is poorly received by them. Especially in the days after decision-making by central banks.
There are always a number of financial instruments that are favored by these monetary actions. Above all, investment funds. It is in them where you must pour all your actions to make your savings profitable with greater guarantees.
It can be the ideal pretext for go back to regular banking products. Time deposits, bank promissory notes and even national bonds. Because in effect, they will increase their performance through these measures. With a fixed and guaranteed return on savings that will offer you greater security.
It is necessary to pay attention that in these scenarios the inflationary procedure is triggered and therefore you will lose purchasing power with the profit it generates from its investments. It will not be as satisfactory amounts as before since it will be neutralized by the increase in prices in your main purchases.
Whatever the case, an interest rate hike it is not good news for your interests as a small investor. But on the contrary, it will generate greater instability in financial markets from the moment of its application.
It will be the most suitable time for you. realign your investment portfolio. Through a thorough review of the financial assets in which you have open positions. You can replace them with others more favorable to these cycle changes in the economy.
As is always the case in equities, the business possibilities they will also emerge in these new economic scenarios. You only have to detect them to open positions in them and from this dynamic you will be able to achieve your objectives more effectively.
And as often happens in these cases, it may also be time for you to take a few days of break into stocks. With no other objective than to check what the real evolution of the financial markets is during the next few days. This performance will be worth it.
In short, it cannot be forgotten that we are facing a cycle change when it comes to interest rates. And that will have a lot to do with the degree of economic recovery in the main countries of the world. With variations in one direction or another and that will end up affecting the bags.
