6 Common Commercial Strategies for Investors (Part 1)

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The process of making successful investments is to be patient, study every day and be able to discern among many strategies that we can use. However, we often ask ourselves: what can really help us succeed when investing? In this article, the answer will be presented to you so that you may benefit from these tips.

1. Caution for the long term. The current market situation forces analysts to act with caution, although the time to have a total shield against risk has not come yet, strategies to protect portfolios have worked positively. According to Amundi Global Investments. “Analysts have a tactical vision for the rest of the year, to add some vitality to the portfolios in a low yield environment.”

In the commercial context, in addition to inviting tactics in the stock market, it also offers opportunities to start creating a portfolio with a long-term vision. Gisela Turazzini, CEO of Blackbird Broker, considers essential to adopt this strategy, as she recalls that “when we invest, we have a part of that company’s business; there is no purchase volatility, so in bearish pressure environments, you have to be smart and look more at the fundamentals than volatility,” further adding “the best opportunities in the stock market are in particularly complicated environments. “

2. Risk assessment. Generally, experts advise investors, before entering the market, to carry out a thorough analysis. “It is essential not to exceed the maximum risk that can be assumed,” says Ignacio Cantos, director of Investments and Equities of Atl Capital, adding that investors who acquire more risk than they are willing to assume usually leaves the market in the worst moment.

3. Diversification. It is essential to look beyond a country or sector to take advantage of all opportunities, according to Medem, “the ideal scenario would be a well-diversified portfolio”. In the opinion of experts, the portfolios must include companies from defensive and growth sectors at good prices, not forgetting companies that operate in businesses that are immersed in long-term trends. Their bets point to Europe and the USA. 

According to Carlos Farrás, managing partner of DPM Finance, there are positive and negative aspects in both geographic areas. In the USA, he is concerned about the existence of many metrics at historically high levels, such as multiples of shares, the lowest level of unemployment in 50 years, an overvalued dollar, etc. Besides, “stimulus such as the repurchase of shares or the reduction of taxes will reduce their influence over time.”

On the other hand, Farrás recognizes that Europe offers more attractive valuations, nevertheless, it is more exposed to a possible global slowdown or trade war, since France and Germany are important world exporters. For these reasons, instead of a regional or geographic investment strategy, he prefers to focus on sectoral or thematic investment.

In the next post, we will present three more strategies that we hope will be very useful.

Bibliography:

ESTRATEGIAS PARA INVERTIR CON ÉXITO EN BOLSA

Expansion. (2019). Estrategias para invertir con éxito en Bolsa. [online] Available at: https://www.expansion.com/mercados/2019/06/01/5cf18e00e5fdeaff198b4665.html [Accessed 14 Oct. 2019].

ESTRATEGIAS FINANCIERAS PARA INVERSIONISTAS

MDSS LLC. (2019). Estrategias financieras para inversionistas. [online] Available at: https://mdssllc.com/es/2018/03/26/espanol-estrategias-financieras-para-inversionistas/ [Accessed 14 Oct. 2019].

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