«You have to be invested, entering and leaving the market is a bad strategy»
The financial education deficit that exists in Spain can be reduced, and achieving it is one of the objectives proposed in JP Morgan AM. "For us to enhance the financial culture is key, it is our responsibility," says Francisco Márquez de Prado, executive sales of the company, because with this "we all benefit" because a well-trained customer "differentiates between the products offered, which is very positive for those companies that are committed to quality ».
—From JP Morgan AM they carry out initiatives aimed at financial advisors, savers and investors to train them and give them guidelines on savings and investment. With this objective they have created the web “Fund your future”. What results have you given them?
—The result is magnificent. The number of visits is very high as is the time spent on the web. Our goal with it is to raise issues such as the increase in life expectancy, the power of compound interest, inflation or the time horizon of the investment, and it is highly valued by investors and the financial advisors who use it to Educate your customers. They see it together to determine their financial goals and their strategies.
—Another of its tools aimed at advisors is the Market Insights program in which they analyze the keys to success with long-term investments. What are those keys?
—The process of investing should not begin by establishing the profitability you want to obtain or the risk you are willing to assume. The first question to ask is what is the purpose of this saving or that investment. Once determined, we must see the time horizon of the investment and what risk you want to assume. Finally, you have to stay invested, because entering and leaving the market is a bad strategy, since it is impossible to know which days can be good or bad. If you have a time horizon in line with your risk profile and a portfolio with a strategy to achieve your financial objective, you must be invested. It is not necessary to invest to look for profitability but to achieve a financial objective, and that change of chip has to be done by clients, advisors and financial entities.
- What other initiatives are being carried out to boost financial education?
—For JP Morgan AM, financial education is key because it is our responsibility and because a trained client has the ability to differentiate between the different savings and investment products that are offered and this benefits the companies that are committed to quality. We sponsor numerous events, seminars and other initiatives that allow the need to save, invest and start thinking in terms of financial objectives to reach advisers and final investors.
Does investing in the long term in a correctly diversified portfolio work?
- Diversification must be a maxim when investing. Of course, the portfolios have to be correctly diversified. On many occasions the mistake is made of thinking that having many products means having a well diversified portfolio and it is not. The important thing is to see the relationship that exists between these products, which act independently. That is the richness of diversification, so a correct diversification involves analyzing the portfolio both from the point of view of types of assets and sectors and geographical areas, and see how they interact with each other.
- For this, professional advice is necessary?
-Definitely. There are many false myths, so a trained professional who knows what the financial objectives of investors is vital to advise them in the creation of their portfolio, accompany them throughout the course of their investment and help them to fulfill the strategy that leads them to Reach your financial goal.
- Why in Spain there is less financial culture than in other countries around us?
—Because we have had a very powerful protection of the State regarding pensions and health, much greater than in neighboring countries. But with the increase in life expectancy, it is increasingly necessary to educate citizens financially so that they save, invest that savings and achieve their financial goals for retirement. This greater paternalism of the State has led Spaniards to be less interested in training in finance, but things are changing. By living longer, citizens are faced with new challenges in which saving and investment are essential to maintain their purchasing power for more years. This is one of the keys to increase interest in financial education in Spain, and promoting it is everyone's responsibility, so we bet so much on it.