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While stock market markets are evolving at record levels, many savers consider securing their earnings, especially as summer approaches. This season is often marked by significant corrections, as shown by past events such as the invasion of Kuwait by Iraq in 1990, the European debt crisis of 2011 or the Chinese Krach of 2015. Transactions volumes generally decrease during this period, rendering the markets more volatile. Investment experts highlight the importance of remaining prudent in a context of geopolitical and economic uncertainties.
Increase the liquidity share of its portfolio
Faced with current uncertainties, it is advisable to keep a significant part of liquidity in its investment portfolio. According to Tikehau Capital, although economic growth slows down, it remains positive and recovery measures offer new investment opportunities. Having liquidity allows investors to seize the cheap purchase opportunities during market cuts. Revocation purchase orders are an effective strategy to position yourself below current courses and take advantage of possible corrections. This approach not only makes it possible to secure investments, but also to ensure a certain flexibility in the face of market volatility.
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Protect yourself with derivative products
For those who wish to maintain their positions while protecting themselves, derivative products can be a judicious solution. For example, the purchase of sales options on indices such as CAC 40 makes it possible to cover the risk of correction. However, these financial instruments require some expertise. Derivative products lose their value if the early scenario does not materialize. Dorian Abadie, analyst at Bestaux, insists that these complex products must be used with caution and are mainly intended for experienced investors. They offer effective coverage, but require a in -depth understanding of financial mechanisms.
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But also inverse ETF
Another alternative to protect yourself is to use inverse ETF, also called “ETF shorts”. These funds oppose the performance of a stock market index, allowing investors to take advantage of the decreases of the market. The inverse ETFs make it possible to take advantage of a stock market correction period. For example, if the underlying index declines by 1 %, the inverse ETF increases by 1 %. Some ETFs even offer a lever effect, amplifying gains but also losses. Dorian Abadie warns that any anticipation error can be expensive, especially since predicting short -term stock market development is complex. It is therefore crucial to carefully assess this option before integrating it into its investment strategy.
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The solution for scheduled payments
The scheduled payments, or “Dollar Cost Averaging” (DCA), constitute a reassuring investment method for many investors. This strategy consists in regularly investing a fixed sum, making it possible to smooth the purchase price of assets. The DCA allows you to benefit from cheap purchases in the event of a stock market correction. In addition, this approach can be applied to ETFs, especially those related to the CAC 40, accessible via a titles account or a PEA. This method is particularly suitable for savers seeking a regular and disciplined investment strategy.
To facilitate the application of the DCA strategy, several online brokers offer automatic paying programs. Thus, savers can benefit from this method without having to manually manage their investments. Among the brokers offering these services are Trade Republic, Boursobank, Degiro, and Scalable Capital. Saxo Banque, with its Savings plan scheduled by Saxo (PEPS), aims to democratize access to financial markets. These automated solutions allow investors to focus on the essentials while optimizing their portfolio management.
While summer is approaching, investors must carefully assess their options to protect their portfolios while remaining attentive to market opportunities. What strategy will you adopt to ensure the safety and growth of your investments during this uncertain period?
The author relied on artificial intelligence to enrich this article.
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