Monday, July 07, 2020 05.55PM / Sponsored Post by Jessica King / Header Image Credit: HBR Ascend
The Coronavirus pandemic has devastated the global economy. As the vast majority of the world went into a complete lockdown, economic activity stifled. Economic sectors that relied on the physical interaction of people were the first ones to suffer huge losses, like retail, hospitality, tourism, and goods transport was at a complete halt.
While we champion the benefits of an integrated economy, the drawbacks are equally vocal. Sector after sector, hit by the economic crisis started off a domino effect. Once thriving businesses were forced by the COVID-19 crisis to capitulate, and raise their flags with the hope that central banks and governments will notice.
Though governments were able to initiate liquidity packages to stimulate the economy, the situation still remains grim for venture capitalists and investors. If you are an investor and are looking for a comprehensive guide that can protect your investment portfolio, as well as make it grow then we enlisted these tips to cut through the confusion.
Also called as an Investment Policy Statement, the importance of this document is overlooked. A solid investment portfolio rests against a foundation, and the IPS form that. The first step towards a thriving diversified investment portfolio is to analyze your objectives, return on investment, risk threshold, and asset classes.
Being a seasoned investor is all about running the right arithmetic, and this is where eminent asset management firms like the Kismet Wealth Group come in handy. Adhering to an investment strategy has numerous benefits. First, it makes sure that there is a cushion to hedge capital against if things look uncertain. Secondly, it also prevents investors from making arbitrary investments, making sure that they follow restraint and discipline.
The biggest mistake that an investor can make is not to anticipate the initiation of a crisis. If there's one thing that the spread of financial history tells us, its that a market meltdown is always looming. Whether it's in the form of a shady housing bubble, a financial depression, or a global pandemic, investors must always be prepared.
The best strategy to prepare for a crisis is to stop day-dreaming about high returns. High-return investment carries an intrinsic high-risk, and this makes investors lose their ability to reason. Seasoned financial advisors recommend that when making an investment, the impact on assets and portfolio should be evaluated, rather than the number of returns. Securing investment capital is the first priority.
Gold will always be a lucrative asset. Particularly during troubling times like those of the Coronavirus, gold can cut through the systemic risk and provide investors with an interest income of about 2.5% annually. Investors should consider funneling money into sovereign gold bonds.
A smart investor will always earn from an upward trend. Equity markets recover when corporate earnings start to increase. These earnings cannot increase if the economy is not on the verge of a full-blown recovery. During the COVID crisis, the best investment opportunities will present themselves during the period of normalcy.
Financial gurus recommend investing in established companies through mutual funds and bonds. Buying on dips and giving yourself a sustained six-month period will definitely guarantee good returns.
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