Smart Finance: Where to Invest Your Money in Times of A Crisis

By: Crown Asia
Smart Finance Where to Invest Your Money in Times of A Crisis

With Covid-19 afflicting the world, people are left not only bereft of health but of wealth as well.

The present pandemic has left many people sick and more than millions without jobs worldwide. In this regard, there is no doubt that this health crisis presents more than just a problem for the health sector. As the world continues to struggle with the new normal without a vaccine, bouts of political instability and social unrest have inevitably plagued various parts of the world. Furthermore, the present health crisis has caused economies worldwide to crash and fall in a slump these past few months. Unfortunately, even the stock market is not spared.

With stock markets crashing and various economic sectors negatively affected, the world is experiencing an extraordinary crisis–one that spells a pecuniary catastrophe that presents little to no chance for financial opportunism. While that in itself does not encourage one to invest money, making sound financial decisions, however, is still incumbent upon us. With that said, we must do whatever we can to ensure the protection of our financial futures. In fact, it is precise during extraordinary yet uncertain times like this that we should do what we are able to in safeguarding our wealth. As a result, determining where to invest during a recession or period of uncertainty is a pivotal step. Bear in mind that fluctuations are inherent to markets, but a crisis such as this one may trigger a continuous decline–particularly to markets of high volatility. With that said, it is imperative to have a diversified portfolio, a meticulous eye on your investments, and constant vigilance on economic situations.

With those three, you can potentially thrive in the world of investments while mitigating most financial risks. However, do not take the plunge right away. It is uncertain times like this where emotional investing takes on a new height. People all over the world may be gripped with a compelling feeling that leads them to make poor investment decisions which are why research is paramount. During a crisis, you need to have a strong risk appetite complemented with the skills to speculate the market trends through supporting data. That, along with unique and innovative approaches towards investing will be of great help to your endeavor. So, continue learning and stay updated.

In any case, here are some of the best investments to make during a crisis:

Low-risk investments

The market has inevitably experienced a major plummet – one that is unlikely to let up until the virus is fully contained or a vaccine is discovered. With that said, experimental investments based on uncalculated decisions should be avoided. Bonds or fixed income and treasury securities, however, are pretty safe. Now is the time to play safe as you do not want to make investments in companies that are highly unpredictable. Companies with consistent cash flow and low debt, however, are your best bet. Play safe and avoid taking high risks while the economy is still trying to recover.

Real Estate

Real estate investments are quite defiant to recessions or other crises compared to other industries. In fact, they can be particularly robust provided, however, that these investments are carefully made. While economic declines can negatively impact the values of homes and properties, it is not as bad as the other industries. These properties are typically sold at a low price–something you can take advantage of. Even amidst a crisis, people are still going to need homes. So, while waiting for things to return to normal, renting out these properties to tenants can be an option. In doing this, you can generate a passive income during a period wherein money is quite difficult to come by. When the economy has recovered and the market has stabilized again, you can then sell these properties at a higher price for larger profits. In this regard, it is imperative to make smart real estate investments that you can use for latent profits.

Crown Asia amenities

Dividend stocks

Another kind of passive income you can invest in is dividend stocks. What you invest grows over time which then allows you to receive a portion of the earnings of the company. However, before doing so, you should take a look at the company’s debt-to-equity ratio. A low ratio is recommended. Make the right decision by choosing the companies that show good investment indicators such as having an increase of dividend payouts for a minimum of twenty-five years.

photo of a smart home showing the stock market

Equity market of staple goods

Another safe and sound investment option are those considered staples for consumers. These are items that are considered essential goods–ones that belong to the first tier in the hierarchy of basic needs. In this regard, these are the items that are constantly bought and needed to survive every day regardless of one’s financial status. Basic needs can range from anything to food and beverages. Some household products and materials that are used regularly or every day are also considered consumer staples. As there is a constant need for these goods, you are ensured of a secure investment option in the equity market.

Equities on industries of non-discretionary goods

Undoubtedly, experiencing a crisis tends to strip us from the luxurious and fancy lifestyle we were once accustomed to regardless of financial status. With that said, people tend to forget services and goods that are merely relevant due to the hype, season of the year of other variables. More often than not, these are the things you tend to spend on cyclically or at least, less regularly. With that said, it is important to invest in goods, services, and industries that stay relevant and have demanded all year round and regardless of the season. It is quite clear what these industries areas have remained quite resistant to recession. Grocery stores, alcohol manufacturers, discount stores, and funeral services–these are some of the industries you may want to focus your investments on.

Smart Finance Where to Invest Your Money in Times of A Crisis

While the prospect of investments may look bleak for now, bear in mind that the market will always recover no matter what. It does not matter how steep the dip is, it will inevitably recover fully in time. Businesses and markets will still thrive–even if the world is seemingly about to end. With that said, choose your investments wisely. Invest in stocks that you would be happy to keep or own. Last but not the least, diversify your portfolio. Do not rely on a single source and allow your investments to thrive at different rates and in different places thereby strengthening your portfolio while ensuring you can avoid massive loss. With a real estate investment in Crown Asia, your money is in good hands. After all, having a home that lasts you a lifetime is a priceless gift that you give yourself today and a worthy investment your kids and even your grandkids can take advantage of in the future.

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Related Blog: Is it Practical to Invest in Real Estate During the Pandemic?