If you can afford not to touch it for at least 3-5 years, one of the best investments in terms of return-risk-liquidity is to invest in the global economy.
- To do so, the ideal would be to invest in a fund indexed to the world with low commissions , like Vanguard, Amundi or Pictet, and forget about the media noise of ups and downs. The media have to fill headlines and headlines because it's their job, but in the last 50 years, the economy has always grown and indexing to a global index is nothing more than that, sticking to the growth of the global economy.
- The most important thing is to control emotions and avoid running when there are falls or invest all your savings after large increases.
- One of the best strategies is to automate the process. Invest each month an amount that you are comfortable with and forget about that money until after a few years.
- With all this, you will avoid the mistakes of market timing and having to waste time selecting companies or managers that will charge you a commission difficult to compensate in the long term, since counting the commission, 85% of active management funds can not beat to the market.
Conclusion : Invests in global index funds (maximum diversification ) with low commissions ( minimum cost ) and automates the process to avoid errors. It's not very exciting, but it's the simplest and most effective long-term strategy.
For residents in Spain, one of the best options that exists is Indexa Capital . They have the lowest commissions in the market and very good customer service.
Example of the evolution of the set of the 500 largest companies in the United States (S & P500):
As can be seen in the graph, there are moments of sharp falls, such as the dot com crisis in 2000, or the 2008 crisis, but in the long term, since 1950 it has always grown and if you had not touched your investment, the profitability would have always been positive.
The natural thing is that the economy grows, so that an index that replicates the 500 largest companies in the United States or an index that replicates more than 1500 companies worldwide, the most normal thing is that they also grow.
There will be more profitable investments, but surely they will be either more risky or with less liquidity.
The best investment and the most balanced in terms of profitability, risk and liquidity ratio, at the moment, is still investing in global index funds . And the simplest option to do it is Indexa Capital.
If you already have experience investing in funds, you can do it on your own normally through any specialized investment bank, such as renta4 or BNP Paribas. This would save you the Indexa commission.