We are talking about safe investments for 2019, analyzing not only the best offers on the market for those who want to invest without risks, but also the main medium and long-term strategies to reduce the risk of our portfolio.
It is not true that financial markets must necessarily be similar to gambling. Those who invest intelligently, following the right information and above all with strict discipline, can achieve fair results on the financial markets, without taking excessive risks.
We will also analyze the concept of risk: yes, because we often do not know and do not easily understand what risk in the investment actually means .
What you are about to read is therefore a complete guide, which will allow you to identify in absolute autonomy the best options you have for safe investments in 2019.
The guide will not really leave anything to chance and will allow you to operate with large or small capitals, sheltering them from inflation and above all making savings, at a sustainable pace.
Let’s see together everything there is to know about safe investments and why they can be a good choice.
What does safe investment mean?
Let’s start from the beginning: what does safe investment mean? What makes an investment less risky than others?
The issue is relatively complicated and for this reason we have decided to give you a small introduction on what financial risk means and above all on what it means to invest in a safe way in 2019.
Every investment presents a risk, otherwise it would not have a return. Indeed, reversing what is the fundamental axiom of finance, we can say that return is directly linked to risk.
All investments have an inherent risk, which however is of a different degree. There are very risky tools, and there are much less risky, almost completely safe tools .
This is it: don’t trust this or that financial promoter who recommends completely risk-free tools. Of course, there are tools that are practically at zero risk, but the “practically” we have affixed means that there are no conceptual risk-free instruments.
Let’s take school examples, to confirm what we have just said:
- Postal books: are they safe? Much, given that Poste Italiane is not only solid, but is also a public subsidiary. In addition, postal savings instruments are largely guaranteed by the Italian Treasury. Can Italy therefore fail? Sure. It would be a catastrophe that would affect the economy of the whole world, but it is certainly not an impossible event;
- Actions: even when choosing solid company shares, the risks are always around the corner. In this case, it is not only the bankruptcy of the company, but also a loss of value, that can worry you. Example? Those who bought UBI Banca shares at the end of 2006 paid them around € 20 each. Today he could sell them for around 2 euros!
Obviously these are not the only examples of risks that we could report to help you understand what it means to take risks by investing in the stock market or investing more generally.
When we talk – and this is the purpose we are proposing in this guide – of safe investments, we are looking for investment instruments that try not to lose value, neither on the short nor in the long term.
It can be done? Sure. Although to be affected, we say to the avoidance of any possible misunderstanding, will certainly be the returns.
It is not just a question of safe investment instruments
Hundreds of our readers ask us what titles to buy to stay safe and invest without too much risk.
In reality the question is not only related to this or that action, this obligation or that other.
Minimizing risks and making truly safe investments means having an active management of your portfolio, with adequate diversification to invest.
What does diversification mean? We talk about it in the next paragraph.
Strategy is perhaps more important than titles
As we mentioned earlier, in reality it is the strategy that makes our investments safe. What does it mean? It means that on the one hand we will have to choose securities with a low risk profile, on the other hand we will have to diversify the investment, inserting in the portfolio, when possible, different types of securities.
An example? You can choose to buy some stocks, some bonds, some ETFs and some derivatives on the indices.
Diversification is essential for having safe investments
Diversification is a fundamental tool for investing with confidence and minimizing risks.
But what is diversification? What are its foundations? Why can it help us lower the risk of our investment?
To diversify means, as the old saying goes, not to put all our eggs in one basket. We therefore need to invest in different stocks, different markets and possibly even different sub-funds.
Imagine having all your capital invested in the shares of an important group, which, however, causes -10% due to unexpected problems. You will have lost 10% of all your investment.
If, on the other hand, you have different types of securities in your portfolio, even the collapse of one of the investments would not have a huge impact on your portfolio because it would be depreciated by other investments.
Although we have limited capital to invest, we can still differentiate successfully, for example, as we will see later in our guide today, investing in already differentiated stocks, such as ETFs.
For small investors or big savers: here are the differences
Yes, investing with huge capital at your disposal or with very small savings is different. In the first case we can organize a very structured and articulated portfolio, which effectively and effectively manages to diversify.
In the second case, on the other hand, diversifying into a portfolio of different security stocks is much more difficult. Don’t worry though, because as we will see later, there are specific titles designed specifically for those who need to differentiate and have no huge capital at their disposal.
The importance of a demo account
Starting to invest from scratch, immediately putting your capital at the forefront, is never a good idea. Our advice is to open a free demo account, which allows you to operate with virtual capital, until you consider it appropriate and more generally to test your strategies.
By using virtual capital, you will be able to work in peace and learn to modulate your risks.
In the table below you will find 4 platforms to invest in the stock market recommended by our team – on all 4 you can get a free demo account for the practice.
The safe tools to invest in 2019
Let’s get to the heart of the matter, or the tools to invest safely in 2019. What are the best titles? We will analyze them one by one, to understand their pros and cons.
Invest safely with deposit accounts
Deposit accounts are certainly one of the best safe tools for those who have to invest less than 100,000 euros. Under this threshold, as we will see later, they are completely safe tools.
The deposit account is also a very simple tool to use: you just need to pay the sum and wait, without doing anything, for the agreed interest to mature.
There are many institutes that allow you to open a deposit account, either restricted or free.
Among the advantages in choosing this type of solution we have:
- Security: thanks to the interbank guarantee fund, the deposit accounts are completely covered up to 100,000 euros, even if the bank goes bankrupt;
- Simplicity: you absolutely don’t need to trade online. You will not have to follow the markets and you will not have to be interested in the investment. The deposit account generates returns without you having to do anything;
- Accessibility and funds: you can also invest very small amounts. You need just a few hundred euros to start investing.
However, there are also downsides regarding deposit accounts:
- Non-excellent yields: the net percentage point is hardly exceeded. In some cases you can get a little more, even if never more than 2%;
- Almost necessary to constrain: it becomes almost necessary to bind the sums, because deposit accounts are bound to offer the best returns.
The deposit account can be the ideal destination of a part of our capital, the one we want to keep in greater security.
Invest in an already diversified way: ETFs could be safer
ETFs are securities that replicate the performance of an entire stock market index. It is therefore an already differentiated investment, which could do for those looking for investments with potentially higher returns, even if they do not have sufficient capital to adequately differentiate on their own.
There are hundreds of ETFs that are also listed on the Milan stock exchange and that you can buy with any trading platform.
What are the advantages of ETFs?
- These are already diversified investments: which means that you won’t have all the eggs in one basket;
- You can choose very large baskets, as in the case of ETF World, which invest in all the best stocks in the world by capitalization. In this case the diversification is even wider;
- They are easy to buy and sell, because they are securities listed on all the major global stock exchanges. If you choose ETFs that have good liquidity, you will also end up selling and buying with really minimal spreads;
- Very low commissions: always much lower than those that are instead imposed by mutual funds ;
Are there any downsides for those who want to invest safely using ETFs?
- Avoid emerging countries: yields are potentially very high, but they are still among the most risky securities in the world;
- They are however stocks, even if composed. The synthetic risk index is always or almost always between 4 and 7.
Secure postal investments: do they exist? Are they convenient?
Poste Italiane has been the natural destination for all those who have saved, in Italy, in the last 60 years.
Today, however, despite the substantial security of the institution, it is no longer the case to invest with Poste Italiane, for the reasons of which we will talk very soon.
Security: Poste Italiane is partly guaranteed by the MEF and therefore its solidity is closely linked to that of Italy. Of course, Italy is a relatively solid country and there do not seem to be – at least for the moment – problems in this sense. Where is the problem then? We see it very soon.
Returns: postal passbook savings accounts and savings bonds today have yields close to zero. What does it mean? It means that you will deposit your money in an institution that has the same security as the Italian Republic, but with lesser returns.
The post office today cannot be considered an interesting investment, no matter how safe it may be.
Our advice today is to look elsewhere, where, at equal risk, significantly higher yields can be taken home without any problem.
In the guide we have offered you today, you have all the best information available to organize a much more interesting portfolio, while remaining within the framework of safe investments.
Safe investments in the bank: do they still make sense?
Can you invest through the bank? Yes, even if it is not always the best of the options we have available.
Investing in the bank means leaving the financial promoter the complete management of our portfolio, leaving him even the freedom to choose instruments that may appear to be safe and which could then prove to be much less secure.
Remember also that the investment through the bank has much higher costs: this means that a substantial part of your profits, especially if you invest or points in investing in a secure manner, will remain in your pocket practically nothing.
Use the bank to a minimum, choosing a very cheap securities deposit if you want to buy bonds. For all other instruments, it is certainly more appropriate to choose a product for direct online trading.
Are mutual funds safe investments?
Nì. It depends on the composition of the fund and the synthetic risk index. What does this mean? It means that within the category of funds there is a bit of everything, from relatively quiet bond funds to equity and liquid funds that instead have a very high risk.
Our advice is, in general, to avoid resorting to this type of instrument. The costs always exceed or nearly 2% on average, which means that for a low-risk investment the return is always or almost negative.
The synthetic risk index: is it useful to find safe investments?
Yes, although not always. The synthetic risk index evaluates the risk inherent in an instrument, taking into account various factors.
The risk is thus expressed on a scale of 1 to 7, with 1 being the minimum risk and 7 being the maximum risk.
It may be useful to consult this information, especially if we are buying titles that are composed of other titles.
However, do not always consider this a Bible: often synthetic risk indices are too inaccurate to give us a precise and reliable idea of the risk that a given investment entails.
Conclusions: what to really know to invest safely
There are several final considerations that we want to share with you that you want to invest safely.
- Doing it yourself helps: if you want to be certain of the risk of your wallet, the best way to do it is to manage all transactions directly. Today with the great online brokers you have available you can do it in a very simple way;
- Diversification is necessary: it is increasingly necessary to diversify, especially if we want to reduce risk to a minimum and potentially increase returns;
- Trusting is almost never a good idea: the interests of the financial promoter or the bank are often in open conflict with yours. What to do then? Simple, read point 1.