How does equity turnover work?From time to time, you need to make new allocations in your portfolio so that the assets work in a balanced way. Next, understand how equity turnover can influence the profitability of your investment portfolio .
Contents [ hide ]
- 1How does equity turnover work?
- 2Transparency and strategy are essential for investing
- 3How to carry out portfolio rebalancing without rotating equity?
- 1When to carry out the portfolio rebalancing?
- 4Escape the equity spin with Magnetis
How does equity turnover work?
The financial market is constantly changing and, in order to continue obtaining consistent returns, investors need to be aware of opportunities. After all, only a truly diversified portfolio is able to leverage gains and mitigate risks.
However, it can be challenging to understand when to sell or buy new assets and, most importantly, how to modify the strategy without hurting yields.
Many questions can arise, especially due to the amount of information disseminated regarding the profitability of certain assets. In such cases, the impulse to reallocate applications according to trends or even motivated by suspicious promises is common.
Whether for fear of losing money or not achieving goals , trading any stock without the proper expertise can cause equity to rotate , compromising gains in the medium and long term.
Rotating the equity is constantly reallocating the assets in the portfolio, without having a strategy or considering the long-term effects, which ends up being harmful to the investor. Simply put, you must pay taxes and fees every time you sell an asset to buy another one instead – and you can suffer from the spread , the difference between the purchase and sale price.
The more you do this practice, the more money you lose over time. Therefore, it is important to understand how to take care of your money properly, avoiding asset turnover .
Transparency and strategy are essential for investing
And to meet their own expectations, investors need to know where they want to go. Thus, it is possible to chart a solid trajectory towards your financial goals .
It is always worth remembering that investing is something that requires expertise at each stage. Therefore, it is most recommended that the investment strategy be developed by specialists, responsible for ensuring the best results for the portfolio.
Among the various options on the market, it is common for investors to make recommendations that are much more advantageous for advisors and other professionals than for the client, due to the commission-based model practiced in many institutions.
This model generates conflicts of interest and further removes the possibility of exploiting your portfolio’s potential to the full. Also, the more trades you make, the lower your net return.
Can you understand why it is risky to turn your portfolio, especially through a commission-based business model? The more orders you issue to a broker, the greater the gain for the professionals involved in the transaction.
Therefore, to avoid losses and in fact maximize your return, it is essential to have a manager that takes care of your money with total transparency .
How to carry out the rebalancing of the portfolio without rotating the equity?
The swivel heritage is a practice still present, reinforced by institutions and experts who do not prioritize the interests of those who invest. Either way, this does not mean that portfolio rebalancing does not need to be done.
Investor needs, as well as market opportunities, can and will certainly change over time. Therefore, it is expected that the portfolio will need to be analyzed periodically so that a new strategy can be built.
Therefore, rebalancing is an essential step for investments, as the technique contributes to true diversification and risk-adjusted return. And we know that, in relation to market impacts, the more assets that behave in different ways a portfolio has, the less risk the investor takes.
When to perform the portfolio rebalancing?
Knowing the best moment to make changes in the portfolio requires the investor to take a critical look at the opportunities available and, to be done accurately, they cannot always be executed without the aid of technological tools.
Contrary to popular belief, the conclusion of a certain objective, its horizon and its level of risk are the most relevant factors for this decision-making. Market momentum, specific scenarios and other factors are only complementary.
Escape the equity spin with Magnetis
Considering their perspectives, it is essential that the techniques used in the portfolio promote high profitability with security to face possible crises.
Thus, in addition to betting on asset diversification, investors need practical solutions that optimize their time, without this meaning giving up the best decisions for their investments.
The Magnetis has certified specialists, responsible for constantly improving a unique technology that ensures the implementation of a irreplicável strategy to their investments.
Proof of this are the more than 145 thousand possible combinations, allocated according to your risk profile and financial objectives. And so that equity turnover does not occur, harming your earnings, we automatically rebalance your portfolio, so you are free of worries.
Therefore, if you want to set new priorities or need to redeem part of your contributions, Magnetis will be responsible for strategically making the necessary changes to your portfolio.
We are pioneers in the investment model completely guided by the investor’s objectives and, therefore, building a relationship of trust and transparency is one of our pillars. We want to help you live the way you deserve, with the guarantee of surprising gains with the support of our strategy.
