Investment and savings opportunities in June 2024 – Idealista/news
The ECB cut the price of money in the eurozone by 25 basis points. And although this has a negative impact on the profitability of savings products, the news is not bad at all for those who want to deposit their money securely and without risk. The reason is that the European Central Bank (ECB) has expressed many doubts about the pace of future rate cuts, which supports return of deposits and invoices at levels that, although increasingly lower, are still reasonable.
By the same token, fixed income investors also have reason to congratulate themselves because the door to building 3% to 4% yield portfolios with moderate-risk bonds remains wide open until further notice. There’s plenty to choose from in corporate and government fixed incomewith treasury bills ahead.
And in the stock market, the theory is that with lower rates, energy companies, real estate companies, and anyone with high debt benefit. Although the fall in the price of money is still not enough to change the sign of these companies on the stock market, you can bet on them sectors with high dividend yield.
At a time of complete uncertainty about the future of interest rates in six months (there are those who continue to bet on two more cuts in 2024, to 3.75%, and those who believe that the ECB will not take any steps for the rest of the year) year), these are the best options to take advantage of the moment and protect your portfolios, given that sooner or later the price of money will fall again.
Deposits and accounts
Some companies have already reduced their high-yield deposits. For example, neobroker Trade Republic lowered its premium on liquidity balances on its accounts from 4% to 3.75% after the first rate cut since 2016. Sabadell has also withdrawn the 6% three-month benefit on its online account, which is making payments again. 2% per annum.
The deposits contain the bulk of the most generous market entities The rate is maintained pending the ECB’s determination of its roadmap. During the year, there is still a good opportunity where SmeBank, Haitong, PayRay and Banca Progetto will pay 3.60% per annum (equivalent annual rate) and allow them to guarantee high yields that compete with treasury bills.
Fixed rent
Doubts that the ECB will continue to maintain contractionary monetary policy until inflation is brought under control are also affecting Treasure letters, which offer yields from 3.37% to 3.48%. In these state titles The key to choosing is timing.
At the June auction, the yield on the three-month term, which had been the highest paying term so far, fell from 3.58% to 3.37%. Now he is the lowest paid of all. A good option is to buy letters from other European countries with the highest solvency, such as France, whose short-term debt offers a yield of around 3.6%. After 12 months, yields in Europe are around 3.4%, significantly higher than the average deposit rate before this period of 2.48%.
IN private fixed income, experts believe returns of more than 3% can be achieved in high-quality European issuers such as banks or car companies, without taking on too much risk. A good option for individual investors is to do this through investment funds.
Actions
The stock market is accumulating annual growth of more than 10% in the case of the Spanish Ibex 35 index, in a year marked by big bank profits. But in a scenario of interest rates falling over time, other sectors should gradually gain the upper hand.
Property developers and SOCIMI could be big beneficiaries, because the change in the money cycle is accompanied by strong demand for housing and assets such as hotels, logistics and shopping centers. Moreover, most of these companies have double-digit dividend yields, which provides protection against possible price corrections.