Invest in wisely is one of the main objectives of any investor, seeking a balance between return and risk. And although there are no magic formulas to achieve this, the truth is that there are some options that are better than others.
Here are five products through which you can invest wisely to maximize your returns while minimizing risk and with the lowest possible costs.
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Products for smart investing
Investment funds are one of the products in which to invest in your money wisely. Firstly, because participants’ assets are diversified in a single product, and most of them have minimum entry conditions.
In addition, they have a favourable tax treatment, as transfers between funds are tax-free, and tax is only payable on redemption if there is a gain.
Increasing competition among institutions, coupled with the consolidation of index funds, has led to a significant reduction in the costs of these products.
In fact, in many cases, their total fees are less than 1%, a very low cost, especially when compared to other investment products.
Pension plans are products with a specific objective: retirement planning for workers.
In fact, the capital can only be redeemed under very restrictive circumstances, the most important of which is retirement, but also serious illness, long-term unemployment, eviction or ten years after the first contribution.
The special feature of pension plans is their attractive tax treatment.
In fact, contributions made to this product are deductible in personal income tax. Currently, they are up to 1,500 euros with a limit of 30% of the worker’s net income from work and economic activities in a fiscal year.
Invest in Exchanged Traded Funds (ETF)
ETFs are hybrid instruments between an index fund and a stock. In essence, they are listed on an exchange and contain a number of assets that track the performance of a given stock market index.
Thus, in a single product, you can invest in a whole basket of shares in real time and know their price at all times, as if it were a share.
The main advantage of ETFs is, as with index funds, their low costs, thanks to their strategy of simply replicating a stock market index.
But they are also diversified, transparent and easy to access, as they can be bought from almost any broker in Spain.
Invest in SRI investment
Socially responsible investment (SRI) is a philosophy that is becoming increasingly popular.
Thanks to the growing awareness of, their main characteristic is that they invest in socially responsible sectors that comply with the objectives set out in international sustainability treaties.
This type of investment is increasingly present in different financial products, such as investment funds or ETFs, and is in line with the objectives of anyone with a minimum of social conscience. And all this without any reduction in profitability.
In fact, the MSCI World SRI, an index composed of socially responsible companies, shows a return differential of 0.95% in favour of the SRI index. Moreover, over 10 years they remain positive by 0.06% when compared to the MSCI World.
It is one of the latest products for investing your money wisely. Automated investment managers, better known as robo-advisors, are a type of instrument that automatically invests a participant’s savings, usually through index funds or ETFs.
Their philosophy is very simple: invest and forget.
In fact, the investor only has to worry about making the transfer to the account associated with the automated fund manager.
It automatically carries out the rest of the operations:
- Asset selection.
- Shifting weights between different assets to match the investor’s new risk profile.
Invest in wisely through inbestMe
Through inbestMe you can choose from a carefully selected range of products, including index funds, SRI funds, pension plans and ETFs for smart investing.
With more profitability and lower fees, so you can get your results in the best possible way.