Investments for Volatile and Uncertain Times
There’s no question that once the COVID pandemic arrived in early 2020, the world economy was in for a wild ride. Since then, markets have experienced some of their largest swings in history. This is especially true for things like cryptocurrency, certain national currencies, a long list of corporate stocks, and selected precious metals. What’s most intriguing about uncertain times and market volatility is that many investors figure out a way to earn solid profits in even the worst circumstances.
Why is it that some asset classes outperform most others when the global economy is in a free fall? The more important question is what are the best places to park money when inflation is up, unemployment is high, and the world is plagued by political problems? The good news is that the following asset categories tend to serve as safe havens during economic crises and financial downturns of all kinds. Of course, there’s no guarantee that any investment will do well in the short or long term, but the following are often sought out by investors during difficult times.
Historically, people have sought out the precious metals, particularly gold, when the securities exchanges fall on hard times, world political crises rev up, and inflation starts building up, as it recently has. The metals represent something durable and physical that tend to retain their value over the long haul. For these reasons and others, millions of working adults maintain at least a portion of their retirement portfolios in gold stocks, gold bullion, or exchange-traded funds backed by the yellow metal.
One reason low-cost issues have the potential to do well in bad times is that many of the corporations are brand new and have lots of room to grow. Often, the organizations offer just one product or a niche service and thus offer the allure of big returns to those willing to buy-in. You can get started by reviewing a penny stock trading guide for beginners that lists all the key concepts you need to know.
When stock prices begin to slide, some investing enthusiasts short-sell in order to earn a profit on the downward move. It seems counterintuitive in a way but makes sense if you realize that successful investing is more about making correct predictions of price direction than anything else. If you want to get involved in short-selling, watch this video which explains all the basics for newcomers.
Survivor companies sell goods and services that tend to remain profitable during hard times, like consumer staples, home medical supplies, and residential security systems. When the economy turns sour, many move their capital out of companies that are having financial troubles and buy shares of survivor corporations for the duration of the downturn. In a way, these companies represent a similar safe haven type of investment as the entire precious metals category but are more suited to people who want to stay in the securities markets and avoid taking on a new asset class like metals.