Financial investments today represent a lifeboat in the perception of many people and families, but how to choose the financial investments best suited to individual personal situations? Awareness of the tools and opportunities offered by the market is a fundamental element essential when deciding to invest their savings or an excess of money accumulated just for investment purposes, so today I will talk about factors related to this awareness:

  • Control and filtering
  • Ability to recognize and enter the “right moment” in an investment
  • Ability to go out “at the right time”

Your financial goals are closely related to future spending needs and also to savings capacity. The achievement of its objectives follows the risk preferences and available investment options.

When you go to define your goals you will need to evaluate how much you can invest.

Furthermore you will have to understand when you will need the money previously invested which is defined in economic jargon as: investment time horizon .

In essence you will have to budget two factors to think about and choose before making your investment:

  • the returns you want
  • the risk you are available to take

These two will give you the elements that will define your financial profile, so they are extremely important.It must be said that there are no investments that will provide you a lot in return for a low risk, and this too is a lesson that you will learn quickly.

It is always necessary to be wary, and this is true for all of those who promise easy profits, certainly there are practices that are not very appropriate, if not completely outside the rules governing the market.

Your advice always asks what makes alternative investments potentially less risky, such as Italian and German government bonds with equal maturity. The role of diversification

 

The rules of diversification

The rules of diversification

One of the unwritten rules when it comes to investments is to diversify and therefore avoid investing all the money in a single security or in securities issued by the same company. The ideal is to opt for different investments between them, they will have to differentiate for example by issuer, sector and expiration dates. Diversification allows you to operate a classic strategy that allows you to reduce the overall risk in your investment portfolio.

Another important aspect when investing one’s money is the awareness of the fact that intuition cannot replace informing oneself in depth. The way information is presented can also help manage the perception of risk and the decisions you will make. Before making an investment, consider and seek answers to all your doubts.

Intermediaries carry out certain activities and must have an ethics of course, here is some information that can help you choose the intermediary suitable for you:

  • the intermediary will have to act with transparency and in an honest, fair and professional manner, to better manage your interests. This principle protects you against a company that, as an expert in the sector, actually has a stronger position than the one from which you are an investor.

  • go to give you correct, clear and not misleading information, since these will allow you to gain awareness about your investment and products and services, allowing you to reach informed decisions.

  • classify you as a retail ( retail ) or professional client. If you do not meet the requirements of Consob Regulation n. 20307/2018 concerning professional clients, you will be classified as a retail customer, essentially as is the case for most individuals, and you will also get more protection.

  • It will guarantee services that take into account your individual economic and social situation. This allows your investments to match your investor profile and your needs .

In general terms, authorized companies can guarantee one or more of the following types of investment services:

  • recommendations on investments, products and lines of action ( investment advice ).

  • management for your investments chosen by you

  • purchases and sales of financial products, without obtaining any kind of investment advice. But in this case, the level of protection is lower than what is expected for the two services previously highlighted .

 

Risks associated with complex financial investments

Risks associated with complex financial investments

Complex financial investments are:

  • derivatives (futures, swaps, forward contracts, options)
  • subordinated bonds
  • structured bonds
  • covered warrants

In this case, the control body (Consob) recommended that the intermediaries exercise and prepare specific precautions that have a relationship with complex products as a reference, in some cases advising against the distribution to retail customers .

Intermediaries according to Consob must in all circumstances inform the client that a product among those on the list that has been recommended is not considered by the institution to be suitable for retail customers .

They should take into account the risks (medium-high) associated with investing in securities not listed on regulated markets or widespread. To disinvest these securities can become difficult and this could happen at a lower price than the one with which they were purchased.

 

Authorized intermediaries and financial promoters

Authorized intermediaries and financial promoters

Intermediaries as well as promoters have specific tasks to refer to. First of all they must adequately inform, and before any subscription, on the characteristics of the investment and on the risks of the same by following the indications foreseen by article 31, paragraph 2 of the Consob Regulation regarding Intermediaries.

They must also make available to customers in the circumstances in which there are investment solicitations, the prospectus concerning the financial instruments offered.

 

It is of vital importance for the customer

It is of vital importance for the customer

Each authorized intermediary must transmit the contractual documentation, or all the documents that are relevant to the service for which the customer is paying .

It is however possible to verify a scenario, the one in which the customer is constantly informed and does not improve his choice.

In fact, excesses on information or the so-called ” information overload ” can even lead to confusion, so before making a financial investment, also consider this aspect which is not marginal.

If you have any doubts about how to best use our loan overview, you are most welcome to write to our online support, who will always say ready to help you find a loan that fits your everyday life.

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