Having an investment account may seem complicated, but the reality is that it is a simple process. Here, the step by step to make an adequate study of the possibilities that exist today and what to take into account when starting.
What options are there currently?
Before opening an investment account, it is important to do some research to understand and familiarize yourself with the options available. Currently in Argentina you can explore different financial entities, such as banks or stock brokers, such as a ALyC (Settlement and clearing agent – Former Stock Exchange Companies) to be able to compare the services and products offered by each one. It is important to always look for Agents registered with the National Securities Commission to fulfill this purpose.
Choose an entity to invest
It is important to consider factors such as the reputation of the institution, the associated commissions and fees, the investment options available, whether it has a web platform or APP, whether it is possible to operate in the foreign market (and its requirements) and the quality of its customer service.
Gather the necessary documents
Before opening an account, some basic documents or prior validations may be required, such as your official identification (DNI for example), being of legal age, proof of address (such as a utility bill) and proof of your financial situation or support for the funds you want to invest, among others. It is important to understand that each entity has its requirements for opening an account, which may vary this process between them.
Complete the application
Once you have chosen the financial institution and have the necessary documents, you must complete an application to open the investment account. This process can be done online or in person, depending on the options offered by each entity.
Document signing
After you submit your request, you may need to sign some additional documents, such as a service agreement or agree to terms and conditions. These documents will set out the specific details of your account and the services that will be offered to you.
Start investing
Once your investment account has been opened and the initial deposit has been made, you are ready to start investing. The financial institution will provide you with information on how to access your account and make transactions on it. On the other hand, at this point it is key that you analyze your investment profile.
On the other hand, a no small issue is identifying your investor profile. This has to do with a set of characteristics and preferences that determine how a person can invest their money. Here, aspects such as the level of risk tolerance, financial objectives, investment horizon and financial situation, among others, come into play.
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Risk tolerance
This is one of the most important factors to consider, as it indicates the willingness to assume potential monetary losses. Some people are more conservative and prefer low-risk investments by weighting instruments of good credit quality fixed income or positioning themselves in a diversified way to balance the portfolio, while others are willing to take higher risks in search of high returns, investing, for example, in variable income instruments or positioning itself aggressively which allows, in the face of a constructive scenario, a upside potential in the portfolio.
Financial goals
They vary according to each individual. Some may seek long-term growth such as a retirement plan, while others may have short-term goals, such as buying a home, financing their children’s college education, or a trip. These objectives directly influence investment decisions, since they determine the time period in which they are expected to be achieved and, therefore, the most appropriate investment strategy.
Investment horizon
It refers to the period of time during which the investment is planned to be maintained in the portfolio. It is important to understand that people who have a long-term investment horizon can generally afford to take on a little more risk as they can benefit from investments that offer greater long-term growth potential. On the other hand, those with a shorter investment horizon may prefer more stable and less volatile investments to protect their capital.
Financial situation
This point is also relevant to define your investment profile since aspects such as the capital you have, income and financial obligations can influence the ability to take risks and the amount of money available to invest.
PPI Digital Clients Team Leader.
Source: Ambito
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