Financial Instruments
What are Financial Instruments?
Financial instruments are assets or contracts that have economic value and can be bought, sold, or exchanged in markets. In simple terms, they represent the different ways that exist to put money to work, whether to invest, save, or manage wealth.
What types of financial instruments exist?
There are countless types of financial instruments, but the most common can be grouped into the following categories:
1. Equity Instruments
Their value fluctuates based on the market and the evolution of the underlying asset.
- Stocks
- Index fund shares
- ETFs
- REITs or SOCIMIs
2. Fixed Income Instruments
They offer predefined payments, although there is always the risk of default by the issuer.
- Government bonds
- Corporate bonds
3. Derivative Instruments
These are contracts whose value depends on the behavior of another asset, known as the underlying asset.
- Futures
- Options
- CFDs
4. Monetary Instruments
They are used mainly for liquidity management, usually considered low risk.
- Fixed-term deposits
- Treasury bills
5. Cryptocurrencies
Decentralized digital assets whose value depends on supply, demand, and market confidence.
- Bitcoin
- Ethereum
6. Luxury items
Non-traditional goods that can be used as a form of investment or value preservation.
- Luxury watches
- Works of art