Whether big or small, I’m sure that more than once you’ve considered what to do with your savings. Although with the money saved in the bank without touching it, the risk we assume is practically nil, it is also true that the return is also minimal, even negative, as is the profit, since the money that does not move loses value with the pass of the time. If you know that you want to get the most out of your savings, the question you will have to ask yourself will be: ¿What is the best way to invest?”
Diversifies and win
One of the most effective ways to control the risk of your investments is to diversify them. According to the Arboribus investment platform, “99% of investors that diversify correctly have a positive return”. So, the greater the diversification, the lower the risk.
What is the diversification? It is about not playing everything to a single card, dividing the capital between different investments, so that if any fails, the money that is lost does not negatively affect the whole of the investment.
Although an investment always carries a certain risk, it is important to do so in companies and sectors that are up, and always with the advice of experts who know the market well and know how to correctly analyze the risk indicators.
¿What type of inversor are you?
Knowing which type of investor is each one allows us to find the investment formula with which we will feel more comfortable. It is a good way to know where we are, where we want to go and how we are going to do it.
There are several factors that define our profile as an investor, and they have to do with money, time and person:
MONEY:
- What capital do we have and how much do we want to invest?
- What is the level of losses that we can assume
- Do we have any support heritage?
- What performance do you expect to obtain?
- Income we perceive and forecast in the future
- Current financial obligations
- Savings capacity
TIME:
- What term we give to our investment
- When will we need the money?
- Our age in relation to the time horizon of the investment
PERSON:
- Predisposition to take risks
- Financial knowledge
- Needs and objectives of the investment
- Behavior as an investor
- Novice or experienced investor?
Depending on the person’s own character, the management of time and money may be more or less successful. That is why it is important to foresee how we will react during the investment process.
- CONSERVATIVE INVESTOR: Your priority is to have a very low level of risk. For that they are willing to make their profitability not very high, and they will look for entities with very secure records. Within this group there are those who want to protect their assets to the maximum, so that profitability can become negative, and those who come to assume a minimum risk, with maximum exposures of 15%, thereby at least preventing the inflation depreciate the equity. They are usually 65% of people 45 and older.
- MODERATE INVESTOR: This type seeks the balance between risk and benefit. Exposure can reach 35%, and people are willing to assume a higher time horizon, which implies that, in the long term, profitability may be higher. They are usually 35% of those over 65, due to their greater risk tolerance.
- DYNAMIC INVESTOR: This type seeks the balance between risk and benefit. Exposure can reach 35%, and people are willing to assume a higher time horizon, which implies that, in the long term, profitability may be higher. They are usually 35% of those over 65, due to their greater risk tolerance.
- ARRESTED INVESTOR: The exposure of capital can reach up to 90%, but the capital increase can be equally high. In this case the investor’s strategy is made in the long term, so that negative returns at various times of the period are easily tolerated by this type of investor. It occurs most often between 18 and 25 years.
The good future of the real estate sector
The forecast for the future of the sector is more than interesting. According to a Servihabitat report, the sale of homes is expected to grow by more than 18% in 2018, as well as prices, which are expected to increase between 6 and 7% in general, but even more so in large cities and in coastal areas. For investors this is very good news. In fact, approximately 24% of domestic purchases are carried out by investors.
According to a recent report by ING Direct, two out of every three people under 35 years of age living on a rental basis are evaluating the purchase of their home. In addition, during 2017 new housing was increased by 8% and second-hand housing by 6%, although not equally in all provinces. in Madrid it was the most expensive, with an increase of 12.3%, in Catalonia of 10% and in the Balearics of 9.1%.
Within the Servihabitat report, the forecast for prices is to increase by 4.7% throughout Spain throughout this year 2018, especially in Madrid and Catalonia. For the Bank of Spain, taking into account the rent and revaluation to 12 months, the return on the home is of 9.8% gross annual.
For all this, today the real estate sector offers some of the best investment opportunities in the market. Discover them all with Alma Homes.
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