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Putting your money in Good Hands

When it comes to putting our money to good use it is wise to take into account a series of recommendations so as to benefit from the highest rate of return. The first thing savers should be sure of is what they want to gain, in other words, their personal objectives. Investors need to know about the risk they are willing to undertake and the length of time they want to invest. Only after considering this should they move on to the second stage: choosing the most suitable fund. A basic principle lies in the fact that in order to get a higher return, you must undertake greater risk. Everybody knows that if you do not take a risk, you will not win.

Consequently, if you want to end the year on a good note, some of the most recommended shares are Santander and Ferrovial, both of which have a good ranking and BBVA has taken a step in the right direction by moving up from eighth place to fifth among the leading companies. On the other hand, Endesa and Iberdrola, the two largest electricity companies as regards stock exchange capital, are undergoing a complicated situation in view of the uncertainty over their future. A circumstance which in practice has favoured their position on the stock market, although it involves a high degree of risk.

Guaranteed funds are another investment product which have started to take over the leading positions among customers’ demands. They are a special category of funds that mean deed holders do not lose the capital invested as long as they keep that amount in the fund until the due date of the contract. At present, of the 252,000 million Euro invested in Spain, 61,000 Euro corresponds to guaranteed funds, in other words, over a quarter of the total amount.

In this way the customer keeps the capital until the guarantee ends, the financial institution will return the money and additional return, if that is the case. Regarding the period of time agreed, the experts advise that it should not exceed five years, as if you opt for a longer period, for example ten years, you will probably lose return on the investment, as the behaviour of interest rates cannot be foreseen. If you want to invest in this product, the best thing to do is to go to a financial institution, bank or savings bank.

The ETF or quoted funds are gradually finding a niche in the Spanish market. They have been available since 20 July and the first institution offering this service was BBVA, followed by Santander. Barclays is expected to follow suit by the end of the year. However, what are they exactly? They consist of a hybrid product among the more traditional investment funds as they have capital value at the end of the day. However, unlike traditional investment funds, they have a secondary market in which they can be bought like shares and this is precisely one of their main advantages. Besides, in the case of long-term investments, commission works out cheaper than other options.

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