A mid term note (MTN) investment strategy aims to buy assets, without the intention of staying beyond a medium or long term of time. – PowerPoint PPT presentation
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An investment strategy is to find a way to buy shares that are profitable to incorporate them into our stock portfolio.
Specifically, a mid term note (MTN) investment strategy aims to buy assets, without the intention of staying beyond a medium or long term of time. Obviously, a medium-term strategy for a trader can be a couple of days, while for an investor it can be a period of more than a year. In this article, we are going to consider the medium term as several months that can last up to a year.
How to invest in the stock market in the medium term?
The economy plays a fundamental role in the evolution of the stock market, therefore, the macro knowledge of the context where companies move must be analyzed accurately, so that they help us to know if a company is making profits or if it has economic problems.
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This technical knowledge to invest in the stock market in the medium term provides us with the timing of the market, that is, the ideal moment to enter or exit a position.
With medium-term trading, we buy undervalued securities to be sold when they are overvalued. This medium-term investment requires high knowledge since decision-making is not enough, but the different alternatives will have to be evaluated regularly and decide whether they continue to be maintained or sold to become liquid.
Mid Term Note (MTN) Strategies
The strategies to follow for medium-term investment depend on the investors preferences since there is a wide range of investment combinations.
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If you are a lover of equities, you should choose the sectors very well, this sectoral strategy works very well in the economic cycle since there are always sectors that are better off than others.
For these investments, you have to have great agility to obtain liquidity and thus rotate from one sector to another.
If, on the other hand, you prefer fixed income, you should bear in mind that this investment is exposed to many inflationary periods that can be a bad investment in the long term, while in medium term note (MTN) periods it could be a good tool to incorporate into our stock portfolio.
Some major investors advise having a stock portfolio that is made up of between 25 and 75 fixed income stocks.
What assets can we look for to invest in the medium term note (MTN)?
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Mutual funds are a good option for medium term note (MTN), whether mixed fixed income or variable income.
The most important thing is to select the investment fund that suits the investors risk profile.
There are other investment products that are appropriate for mid term note (MTN), such as CFD s, cash shares, ETF s, financial options, etc., each one has its own characteristics, therefore, it is advisable to know their advantages and disadvantages to adapt them to our needs.
For example, if we have an investor who has little capital and wants short trades over time, it is advisable to look for a broker to carry out stock operations with CFDs.