(Expansión) – In previous articles I have shared my point of view regarding some assets or financial instruments that could be useful as means of investment, but I had forgotten a very important one: investment funds.
This instrument could be a viable option if you are a new investor or do not have much knowledge about how and where to invest. And if you are already a qualified investor, you may also be interested in some of the points to consider before participating in one.
Let’s start with the basics, an investment fund is an institution whose purpose is to buy and sell ‘investable assets’ with the resources that come from the sale of the shares representing its social capital; that is, as a portfolio created with different securities -purchased with the money of several investors-, these are intended to generate returns based on a horizon and objective.
One of the advantages is that the portfolio is managed by experts, so you don’t have to worry about which assets to buy or sell, when or to whom, etc. It is worth mentioning that, when participating in an investment fund, the investor acquires shares of this company and the yield is determined by the difference between the purchase price and the sale price.
These types of instruments are quite accessible to small and medium-sized investors, since it is a way of investing in stock instruments, without the need to open a millionaire account in the style of Rich Uncle McDuck.
Although it is a simple way to invest in qualified instruments, it is essential to take into account that there is also a considerable variety of funds, which adapt to different types of profiles and horizons.
For example, there are equity funds, debt, some are indexed or associated with some local or international index or there may also be some that are associated with other currencies such as the dollar, so our task as investors is to investigate about funds that call our attention in order to choose the one that best suits us and our goal.
Now that we know what a fund is, I consider it essential to take into account some points that will help you choose which option could be the best for you: first it is important that you evaluate your risk aversion, here we will take a little more time, since the decision can go hand in hand with this tem
I suppose you have heard that the higher the risk, the higher the return; Most of the time this is true, but you also have to take into account the term in which you want to invest, since this phrase is almost always true in a long-term horizon, but you have to keep in mind that in the short term assets can be volatile.
For example, a portfolio of equities, if it is indexed to the S&P, is likely to present a positive return in 10 years, but if you started investing near the beginning of an economic crisis, such as 2008 or even the one caused by COVID -19, which should not be ruled out since, although it is not common, it happens every certain period where your investment could be reduced for a season, perhaps one or two years, in which the economies begin to recover.
Therefore, if you consider that a scenario like the one outlined could affect you emotionally, it is best to invest in a fund that is more aligned with a conservative profile, that is, fixed income, for example.
To determine how much you resist the risk, it could help you to ask yourself questions such as the following: what is your goal or objective when investing? How many months or years could you invest that capital? What do you want to do with the investment? to see losses and how much are you willing to lose? Once these questions are resolved, what would follow is to investigate a little.
By research I mean that, although you do not need to have knowledge of finance or economics, it would be good that before reaching out to an advisor you are informed about some basic economic aspects such as what to expect from the largest economies in the coming years.
Experts see growth or setbacks, which industries could present advances, issues that are becoming relevant such as clean energy, exchange rate and inflation, these issues could help you make a better decision and, although it sounds complex, you can find information about it in a newspaper, Central Bank pages, online articles or specialized blogs.
Once you have the above, you could look for investment funds in different institutions, for example, banks, online investment platforms, fund marketers, brokerage houses, among others, the important thing is that you make sure that they have the necessary permits by part of the regulatory institutions.
I hope that these tips help you and motivate you to invest in other financial instruments to improve your finances.
Editor’s note: Alejandra Vargas is a stock analyst at Grupo Financiero BX+, a financier and a bit of an accountant, she practices ice skating, yoga and likes to read books on various topics. Follow her on . The opinions published in this column belong exclusively to the author.
