Treasury management is the American term for the management of corporate assets. Treasury management also includes the activities of companies that want to ensure a high-yield investment to secure their operations. At present, capital markets around the world are characterised by low interest rates. The interest business is becoming increasingly difficult for companies, because a net return that at least guarantees capital preservation while taking inflation into account can hardly be achieved. Therefore, the question of how to better position the treasury management of companies in the long term with a clever strategy in the interest rate business is becoming increasingly relevant.
Expected return on investment for companies and security philosophy
Companies also have liquid assets that can be invested in the medium to long term. However, it is important for the investment of companies that they predominantly rely only on safe to very safe financial products. After all, it is not the task of the company to generate a very high return through short- to long-term speculation. Because here it is true that high returns can only go hand in hand with high risks. However, it is important for companies that cash and cash reserves remain available even if strong speculation and crises shape the financial markets, which is expected for the coming years.
Hedging against currency risks
Many companies are also active outside the euro area and therefore have to reckon with high currency risks. Therefore, it makes sense to pay attention to investment opportunities outside the euro area. Here, however, it is important to focus specifically on currencies that have proven to be stable in the long term, even if you do not necessarily have the majority of business relationships in these currency areas. An investment in dollars, pounds or francs hedges currency risks and at the same time has good return prospects if you can rely on very safe debtors (states or large companies).
Yield optimisation for investment opportunities
In view of the current very low interest rates, companies should not be or remain invested for so long. But it would also be a mistake for companies to focus only on very short-term investment opportunities. This is because interest rates are lowest here or are sometimes in negative territory for foreign currencies. Companies that split up their financial assets and transfer them to different fixed investments with short- to medium-term target perspectives are well positioned.
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