Independent Financial Advisor and Co-Founder of Affari Miei
February 12, 2024
For days I have been witnessing a dual trend which is worrying me to the point that I took the time to write this short reflection that I want to share with you.
Topic of the day: bond funds.
I am quite convinced that if you have signed up to some thinking of “invest safely” e “without risk“You’re not doing very well.
While, if you have not signed them and are a bank customer, in all likelihood, you will have already received the phone call from your “consultant” of trust.
In either case you would do well to sign up to ours thematic webinar on 14 October but, in any case, continue reading because there are some reflections I want to share.
Hypothesis #1 – I subscribed to bond funds and now I am making a loss
The most frequent hypothesis of all. I try to imagine the scene: you invested because you spontaneously made a request to bank or, a classic hypothesis, as soon as you moved some money into the account you received a phone call with an “invitation to the branch” to “get to know each other”.
You asked your investment “adviser”calm down” because you didn’t want to take risks and, on the other hand, they assured you of “capital protection” in exchange for “certain returns”.
Now that the bond market it’s going badly, you don’t know what to do: your “consultant” is elusive or doesn’t know how to give you serious answers. This whole situation makes you feel a bit nervous.
What to do in these cases?
First of all, don’t panic.
The fact that you signed up bond fundsin many cases, is the absolute “least serious” thing you can do.
The huge problems are the ones you don’t know about and that arise from traps that you often don’t know: entry fees, very high annual commissions (they earn even if you lose and even if they played a trick on you by eliminating the entry fees you are still paying a lot), commissions in case of early disinvestment and short-term deadlines are just some of the factors that could pulverize thousands of euros.
Whatever your state of mind, therefore, the situation cannot be resolved in a few minutes because every action you take could cost thousands of euros.
Hypothesis #2 – The bank called you to offer you to subscribe to bond funds
Do you know why it happens? Because they are desperate.
Many of the people mentioned in point one are selling, sometimes capitalizing huge losses, and they don’t know who to place the funds that remain “free”.
The paradox is that what scares the people mentioned above is sold to the unsuspecting ones as the “big deal of the moment”.
Here too, I leave you with some questions that you can ask yourself to think about:
Do I actually need these funds? In the vast majority of cases, customers “push” sign up for random things, following a proposal from the bank, only to then realize that they need a hand to understand more. The result is that, when people come to me, I find myself managing complicated situations created by this unconscious stratification. Getting out of it is often a slow and expensive process; Do they make sense in my investment strategy or are they offering them to me just to make me put the liquidity I have on hold somewhere? Am I convinced of what they are making me sign up for? Do I understand or am I trusting the promise of “safe returns”?
Asking yourself these questions can be useful to avoid ending up in a few years’ time situation referred to in point #1.
To conclude
I hope I was able to provide you with enough information to at least draw a conclusion minimal relief from this situation which is worrying many people.
Pensaci…that’s your money!