In an environment of low rates, The Covid-19 pandemic has accelerated the commitment to alternative assets to those of the pure cycle as a way to complement the portfolios with profitable and innovative proposals, according to the Banca March analysts.
In his opinion, the current scenario is marked by a negative interest in real terms (discounting the effect of a “rapidly normalizing inflation rate”) and for a greater concern for the social and environmental impact of our actions.
Under these premises, the aforementioned experts have developed a decalogue of basic principles that, given their experience, describe the operator you want "Be successfully guided in decisions about where to deposit your money."
THE TEN RECOMMENDATIONS:
1.- Liquidity costs money. His advice at this point is to reduce liquidity to the minimum necessary, "since it will continue to be penalized doubly by negative rates and rising inflation."
2.- Diversify portfolios as much as possible. "It is not a question of number of products, but of making truly different bets, which implies investing in all kinds of strategies and markets," they explain.
3.- Active management. Banca March managers argue that markets react very quickly to changes or to the expectation that they will happen. "We are witnessing violent processes of geographic, sector or even style rotation that require a continuous adaptation of portfolios."
4.- Invest for the long term and properly plan the use of immediate liquidity. In this regard, the aforementioned analysts point out that, for that part of the savings that does not require immediate availability, there are very long-term investments in which to obtain an attractive premium.
5.- Bet on private markets. "Venture capital, unquoted debt, infrastructure or real estate, compared to the options that provide immediate liquidity, improve diversification, prevent hasty decisions and thus improve the risk / return ratio," they argue from Banking March.
6.- Do good and do good. Adding the analysis of non-financial aspects to decision-making, such as social or environmental, not only does not penalize profitability, in his opinion, but also helps mitigate some risks.
7.- Incorporate alternative, non-traditional strategies, which, as detailed, "provide an asymmetric performance, less exposed to the direction of the markets and more to the expertise of managers to take advantage of differences in the behavior of assets, regions, sectors or styles."
8.- Use leverage carefully. In an environment of negative real rates, "it can be an interesting way to improve profitability, but with certain limits that do not throttle investment at the most inopportune moment."
9.- Lean on qualified financial advisors. "The changes introduced by the MiFID II community directive have brought different benefits to investors, improving transparency, eliminating conflicts of interest and requiring a certified qualification from financial advisers," they highlight from Banca March.
10.- Delegate decisions of a more tactical nature to professionals. According to these experts, "only a professional manager thought about what to do with his money in the middle of March 2020 and had the means to take advantage of the crisis."
. (tagsToTranslate) Decalogue (t) recommendations (t) for (t) making (t) good (t) decisions (t) saving (t) investment (t) Category: All (t) Category: Pulses (t) mostread_ultimas ( t) mostread_fundsnews