Operating in Financial Markets: What should be considered?

WRITTEN BY Pol Martí i Salgado
19 Oct, 2021 — 4 min
Operating in Financial Markets: What should be considered?

Nowadays, operating in financial markets is accessible to everyone. Whether through the bank or simply by registering with an online broker, one can have an account open in just a few minutes. As a result, more and more people are entering this world to earn extraordinary income. But, is everyone prepared to operate in the markets?

It's evident that in our society there is a lack of financial training to operate correctly in the markets. Nevertheless, people continue to operate, hoping to achieve positive returns.

For this reason, I will outline three points worth considering when operating in financial markets.

First of all, it is necessary to assess what type of asset management will be chosen. There are predominantly two ways to manage portfolios: passive management and active management. The former involves buying and waiting for the market to yield a return. In the latter case, through various buying and selling operations, attempts are made to obtain returns higher than the market. Therefore, one must choose the option that best suits each of us.

Once it has been decided which management approach to take, the strategy to be followed to carry out the operations must be selected. Mainly, there are two types of analysis: technical and fundamental. Without going into too much detail about how they work, technical analysis is based on the study of quotes through charts and indicators; on the other hand, fundamental analysis involves studying the financial statements of companies.

Finally, once the management approach and the strategy to be followed have been decided, the assets to be used for the operations must be chosen. To make a good selection, firstly a macroeconomic study of the country where one decides to invest is necessary. Secondly, a microeconomic analysis of the sectors operating in that country must be carried out. And finally, through the chosen strategy, it will be decided which assets to purchase.

Therefore, as we have seen, investing in financial markets is much more than just buying and selling shares, and one must be very careful when carrying out operations if satisfactory results are to be obtained.