Everyone understands that it is prudent and wise to diversify the assets in various investments, such as a wide portfolio of securities or mutual funds. This is what is called "not putting all your eggs in one basket". Is to give up on finding the ideal investment in exchange for greater security and lower the risk of the entire estate.The temporal diversification is much less known but just as useful or more that diversification of assets in...more
The opportunity cost is something every investor should keep in mind permanently. This is what is left to gain by not having the money invested anywhere else other than that found today.In theory everyone (except for rare exceptions) is provided at a cost incurring opportunity because you can not have all the assets invested permanently in the perfect investment.In practice it is unrealistic to continually seek the best investment the world but...more
Diversification is based on prudence. Diversifying is to accept a lower return in exchange for a lower risk also.If an investor was able to know what is the most value will go up in the future would not need to diversify, since in that case would invest all his money on that value and get the maximum return.But in practice we do not know what that ideal value in advance so that the most prudent, even for very experienced investors, is to resort to diversify.When diversification must take into account 3 main factors (the number, weight and type of values that comprise the portfolio) and 2 secondary (emrpresa subsector and geographical area).Regarding the number of values that comprise the portfolio very thorough studies have been conducted in different bags that stand at about 20 the number of "ideal", taking into account the profitability and risk.The greater diversification and lower risk would be achieved by investing in all securities listed on the Stock Exchange. For small and medium-sized portfolios that have the problem of having to bear too high a commission that would reduce profitability, as it would have to buy 200, 1,000, 5,000, ... companies, depending on the stock...more
Ideally find some way or system to detect the minimum (and maximum) of market movements. But it is not realistic. Some tools try to detect the minimum (and maximum) of each movement, such as graphic and technical analysis, Japanese candlestick or candlesticks, the analysis of money flows, etc.. But no tool is infallible and sometimes give false...more
It is commonly accepted that the vast majority of mutual funds fail to even match the performance of its benchmark index (IBEX 35, Eurostox 50, S & P 500, etc.). Long term. Some may beat during certain periods of time, but are not able to overcome long periods. There have been many studies on all mecados and the result has always been the same,...more
The big Spanish banks (Banco Santander, BBVA, Banco Popular) and any other company, such as Iberdrola, have programs of reinvestment of dividends to its shareholders. For example, dividends that are charged to the shares of Banco Santander which are held in the portfolio are used to buy more shares of Banco Santander.To qualify for these plans only have to deposit the shares in the bank itself (or any of its affiliates) and apply. That is, if you buy shares of Banco Santander must be deposited in Banco Santander or Openbank , if shares of BBVA BBVA have to file it or Uno-e , etc. Dividends received are automatically entered into a special account (the account that is associated with reinvestment plan), which usually gives a higher interest account to the rest of the market. Once a quarter the bank itself is responsible for purchasing the maximum possible actions with the money accumulated in the account automatically reinvested. It is sometimes possible to make additional income from reinvestment those accounts to buy more shares when the time of reinvestment. This should be consulted about conditions then current, as they may vary. These extra income sometimes allowed to any other...more
The stock index (IBEX 35, Stock Exchange General Index of Madrid, S & P 500, Dow Jones, Eurostoxx 50, Xetra DAX, CAC 40, etc.) Do not include dividends paid by companies. This means that when, based on a particular index, a means of public...more
Average, or pyramiding, low is to buy more shares of a value that already has at prices below that made the initial purchase.Do it right or not depending on the value and the strategy that uses the inverter.I think when you trade should not be...more
The Spanish stock market is one of the cheapest (in terms of transaction costs), efficient and transparent in the world. In addition, many Spanish companies are among the strongest and best managed in the world. It is therefore logical that a large...more
Financial agreements can be accessed by any two people who are married or are preparing to marry. Financial agreements are binding - in that sense they are very hard to overturn - but they do need to satisfy the official requirements specified in...more
Have you been looking for passive income ideas to help you earn a great income online that you can achieve financial freedom with? Thousands of people everywhere are searching for the same thing and you are about to find out the most powerful ideas...more
Many Americans worry about retirement planning. Financial advisors with a certificate from a retirement institute can help navigate the complexities of retirement planning. About 50% of US workers over the age of 45 do not know what they need in...more