Factors that affect investment decisions

The health of the financial market is conditioned by a multitude of factors that generate continuous fluctuations in the values of the securities, in the rates … The Ibex 35, the Euribor or the inflation rates, are some indicators that define, among other things, the decisions of investment of the savers.

In this post, we will explain what are the two factors that influence investment decision making and how they are altered by external factors, over which there is no personal control, which directly or indirectly affects investment products. It is important to know that all this will affect the stability of the financial system to which we all belong or as bidders or claimants of funds.

 

Risk and profitability as personal factors

Image result for riskBefore making any investment decision, as an investor, you must prescribe a threshold of risk and profitability that you are willing to face. In addition to being necessary to know how the different stock markets move so that, when investing, be able to consciously decide where, why and at what price.

In all stock markets where financial assets are exchanged, they carry a certain level of risk in exchange for a certain return, that is: the most attractive returns are paid at the risk price, depending on the risk you are willing to assume, your profitability will vary.

According to the CNMV’s Information Guide, it defines risk and profitability in investment decisions, as follows:

  • ” Financial risk is the set of factors that can determine that the investment provides a return different from the expected, above or below. Risk means uncertainty and, financially speaking, it is considered that incorporates the same risk obtain a 20% above or below the expected profitability. Logically, the risk that worries the investor is the second one, that is to say, the probability that the profitability is inferior to the initially predicted one “.
  • “The profitability of the investment is, in its simplest form, the quotient between the net returns of the investment and the amount of money invested, expressed as a percentage”.

These two factors will determine the different investor profiles so, depending on what you expect from your investment and your aversion to risk, you will opt for one product or another.

In this report, the 5 influential factors are summarized:

Infografía factores decisión inversión

 

Fixed-income securities market

Fixed-income securities marketIn the fixed income market, products are, in many cases, the perfect choice for investors. They are negotiable securities issued by companies and public institutions. One of its main attributes is the security they present.

The most demanded product are bank deposits although there are others such as public debt (treasury bills and government bonds …) or private debt (issued by companies), preferred shares …

It is true that any investor who is not able to assume a high risk opts for this type of products although their returns are not particularly high.

But what external factors can affect the profitability of these products?

Evolution of the currency

If the value of the currency at the time of the investment and at the time of return is different, the profitability of the operation will vary. If the value of the currency is increased, the profitability also if, on the contrary, the currency depreciates, the profitability of the investment will also do so.

Interest rates

The interest rates will also mark the return on the investment, that is, if the rates rise, it is possible that the investor loses money with respect to the profitability that he hoped to obtain. If, on the other hand, the rates fall, the expected return will be higher.

 

Equity market: The Stock Exchange

Equity market: The Stock Exchange

The Stock Exchange is a market in which the majority of Spanish investors invest their savings. It is very volatile and suffers constant oscillations where the variables risk and profitability are the two most important characters that will determine all the operations of the savers in making investment decisions.

It is a market with attractive returns paid at a risk price, that is, depending on the risk you are willing to assume, your profitability will vary.

The main financial asset that is demanded or offered on the Stock Exchange are the shares or securities of the companies listed on it. They are assets with very variable values and depend on uncontrollable factors that can affect favorably or unfavorably.

Currently, in Spain, there are many factors that are moving the prices of the titles.

So, what external factors exist that vary the value of this investment product?

Business changes

The changes produced in the business fabric can affect positively or negatively in this stock market. The price of shares quoted on the Stock Exchange may be altered upwards or downwards as follows:

  • Opting for an internal development that increases the added value of the company by generating innovative products, approval of beneficial projects or making acquisition decisions, a fusion of other companies that are positive, will cause the values of the actions, in these cases, to increase.
  • If, on the contrary, there is fraud or negligence on the part of the company, there are political or social factors that adversely affect them … Their shareholding values or their quotation on the Stock Exchange will decrease making that company less attractive.

Inflation

Inflation affects the Stock Exchange and the value of the shares directly.

If we understand inflation as the generalized increase in prices within an economy that will cause a reduction in the purchasing power of investors in addition to lowering the value of money, listed companies will be favored in moderate inflationary periods (0% a 2%). The reason is simple, the slight rise in prices moves easily to consumers.

On the other hand, if inflation is very high, prices will not be able to compensate for the large rise in prices and consumers will accept these increases more difficulty. The same happens in deflationary periods where the value of money rises and represses, therefore, consumption and investment.

Government decisions

Industry, as a rule, is regulated by the government. It is true, that some sectors are more intervened than others because of it, a bad decision can cause the investment in that company to be seriously damaged.

In Spain, we are currently going through a period in which, the case of Catalan secessionism, is causing the equity market oscillate sharply creating distrust among investors.

A part of all these factors, there are many of them that can occur suddenly and can cause positive or negative effects. Whenever it is invested, one must be well informed of the economic, political and social context of the country, in addition to knowing the conditions on which the investment product that is ultimately chosen is based.

 

Are there alternatives that are not affected by these factors?

The answer is yes. Keep reading…

Investments in loans guaranteed by SGR

At MytripleA we have the perfect alternative for all those investors who want to escape the risks arising from those external factors that mark the profitability of their investment.

The investments in loans https://www.paydaychampion.com/ guaranteed by SGR are a type of investment insured by Reciprocal Guarantee Societies that has the backing of CERSA and the FEI. In addition, they show an attractive 2% annual return + Euribor. A priori, it seems that profitability can be reduced by this index but the reality is that the Euribor only plays in favor of the investor. The Euribor only adds up. If the value is negative, the base 2% does not subtract it, since it becomes a zero value. Only if it is positive, the return on your investment guaranteed by SGR increases.

Do you want to know more about this type of investment? Download this Investment Guide in crowdlending and become an expert. It manages to maximize the profitability of your money without taking unnecessary risks.

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US debt and growth: Keynesian illusions

Do we want to examine in this paper a simple question: to what extent is the US economy a debt economy?

This seems obvious, the US has seen to increase their total national debt more and more strongly since more than thirty.

The cumulative debt of households, general government, non-financial and financial enterprises has steadily increased, the country is getting indebted to the outside world by accumulating a net debt consolidation www.1984karenmillen.com/payday-loans-online-cant-support-a-pile-of-debt (assets held on the foreign by the USA – Assets held on the USA by the foreigner) more and more important (7500 billion of dollars in 2013).

However, this idea that we have often advanced deserves verification. Evidence – especially in statistical economics – is a source of surprises. Crossing data can raise questions. By linking GDP growth and debt (s), we were surprised at what we found. GDP is well driven by debt, but we must specify which, and especially we must ask the relationship of debt and crises, the culmination of which was the crisis of 2008. The US is still not out.

This paper is also part of the continuity of a small series of contributions contesting the Keynesian idea that it would be enough to use a redistributive taxation or to involve the public debt to revive the activity.

We have already expressed doubts about the use of redistributive taxation by raising questions about its implementation.

There is no hidden treasure or capital gains taxation solution to hand over if growth is patrimonialism. It remains to be seen whether it would have been possible – as Krugman and Stiglitz invite us – to emerge from the crisis by making demand play a greater role in stimulating activity. The staggering growth of federal debt makes this option questionable.

But it is the problem of the general indebtedness of the country and the effects of this debt on the growth of wealth that can shed light on this issue. By comparing the level of GDP and the country’s indebtedness, we tried to provide some answers. And to our surprise, the response elements have raised new questions.

We chose this connection because it seems to us the simplest; it also offers the possibility of reasoning in an orderly way by distinguishing the dynamics – real or supposed – of the different types of debt on growth. It is on this path that we encounter crises in a somewhat unexpected way. The fall of this paper suggests that the attempts to resolve the crisis implemented by the FED-Treasury couple are a delusion in the medium term, it may be that they induce a new crisis in the coming years.

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New investment strategies: Better buy shares on credit than save for a home

It was cheap, never to borrow someone else’s money. This opens up new strategies – especially when buying a house.

An ll get upset about the low-interest rates on. But who wants to buy a house, cheers. Personal loans now less than two percent, which has never happened before. So low-interest rates to stimulate thought patterns that previously did not make sense. Today they can be useful. And home buyers save a lot of money.

Editor in the department “Money & More” the Frankfurter Allgemeine Sonntagszeitung.

So far, it was clear: If the home purchase decency, all the savings were scraped together to finance it. At least to bear the building costs, ie mainly brokers, property taxes, and notary fees. Up to ten percent of the house price makes it. If anything was left over from Ange divisions, it was used to put it in the financing of the house.
The loan from the bank could then be correspondingly lower. Later, when the credit was already running a few years and the homeowner got a large sum of money – for example from an inheritance, severance pay or a bonus – it was used for special repayments of Baukredites. That is, it was repaid more than agreed upon so that the house is paid off faster.

In the new era of micro interest rates, however, a different approach might be less expensive. Who invests in equities in the long term, can achieve significantly higher returns than he paid for the construction loan interest rates. So why sell the shares and put the money into the house? It could offer instead to retain the shares and to agree a higher loan amount for the purchase of the house. Most banks allow. Later, larger amounts of money they can not be used for unscheduled, but also for stock purchases.

A look at the performance of stocks suggests such an approach: Since the seventies, the German share achieved in the Dax in average pre-tax return of 8.3 percent a year. This has the VZ VermögensZentrum for the Sunday paper for an investment period of 15 years of all things – the frequently dialed term interest rate for construction loans and therefore comparable. During this period, investors have despite all interim shares crash never made losses but in the worst case two percent, at best, but 15.7 percent gain in the year.

Two sample calculations of FMH financial advice for this newspaper will now examine whether the strategy would be worthwhile (see chart). Reckoned they were once with seven percent and the other time with conservative four percent pre-tax return each year. Seven percent scored the share portfolio according to the calculations of the VZ wealth center with a probability of 65 percent, four percent return with 94 percent probability.

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Things To Know About Merchant Providers

The idea of setting up a merchant take into account your internet business can be overpowering. What do I need? How much is this going to cost? How long could it be going to take? Will it be secure? Do I need one of those bank card processing machines?

Select your merchant service provider definition carefully — Check that your payments processor includes a good reputation and has already been Verified by Visa plus MasterCard SecureCode. You should also screen your provider’s logo and also the logos of relevant credit card schemes which they are a portion of. These are one of the leading things clients look for when deciding whether or not to buy from a given online shop or not.

Several lenders have websites to work on learning more about the services they provide to you for gain a lot more control of your money. You can also make an application for payday loan settlement https://pushbuttonfor.org/payday-loan-debt-settlement-and-how-to-use-it-correctly check my source online as well. Generally, you can hear back a reply in a few hours. In some cases, your final decision is almost instantly. Searching online for that lender best for you is worth your time and energy.

Once you have gotten your website, you will want to choose a merchant account provider. This is easy to do. All you have to perform is head on over to PayPal, ClickBank, or 2checkout, plus sign up for an account so that you can begin selling on your website immediately. There are more merchant account services available, but these are the ones which are very good, and very easy to work together with.

After the user has clicked on the submit button, various investigations are performed. These investigations include the authenticity of the credit card, the validity of the card, the reliability of the password, funds accessible in the user’s account, and perhaps some fraud checks.

For some, however, PayPal isn’t a practical solution, plus instead, they choose to opt for the standard best merchant services company to work for companies. If you are researching them, be sure you seriously consider the fees that are connected with each transaction as this effect directly on your profits and become sure you can afford the costs which are associated with them.

Allow us to compare some of the many product owner accounts. Are you looking for the lowest deal fees or rates feasible? Maybe a free shopping cart option would be your primary interest? Credit card solutions compare and contrast the very best merchant account providers — so you can see which processor chip offers the features and advantages that fit your needs. While some could be looking for a lower batch charge or transaction price, others might be hoping for a lower royals percentage. Comparing rates plus added bonuses is always essential in the credit card world.

In the end, a company that does not possess some online presence is not going to final. The internet is growing each year. It is far from getting smaller, and it will not disappear. The odds are high that almost all purchases will be produced online in the future. People still find it dull. They like to have the ability to shop from home and have products mailed to them. They such as this convenience. Companies need to create these customers happy plus they need to make a profit. Selling products online to buyers along with credit cards will accomplish both these things.

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