May 4, 2020 / Business

How To Invest In The Crisis Of 2020

market cap

In this article, we will talk about financial literacy, because there is nothing to meddle in any market, regardless of whether it is about stocks, cryptocurrencies, or gold without basic rules. Note that this information is not a financial recommendation.

Background

Regardless of the situation, you should start by closing current debts.

We are not talking about Robert Kiyosaki, who likes to talk about how he borrowed and got rich on it. Because in that case, we are talking about a loan for the development of a business that generates income. We are talking about bad debts that create losses. Therefore, your financial affairs are in a disgusting state, you do not control your money and spend more than you can afford.

Therefore, the first step is to start keeping a record of expenses in order to find an opportunity to save. If the savings do not produce the desired result, then it is time to look for a second, third, or what kind of job is there. In general, increase your income.

The second stage is repaying and saving funds. It can be cash or a bank account, for reliability, it is better to divide.

It is important that you can get these funds at any time and have enough for at least two months of life in the usual rhythm, provided that there is no wage or income from the business.

The third stage is the formation of the capital for investment. Because cash is constantly depreciating as a result of inflation, and our goal is to earn income to increase our own well-being. Thanks to modern technologies, thanks to which you can start buying assets already at $ 100, but you can simply explore the markets and see how it works with just $ 10.

It is clear that for a serious income you need to have an impressive amount. But even if you enter a market with little capital, you can still make money, and it will be better than just watching how your savings depreciate as you print new money in the basement of the Central Bank.

Low Risk

The lower the risk on the asset, the lower its profitability, and vice versa.

If we recall Robert Kiyosaki, he is an ardent supporter of real estate investment. It can be criticized for a long time because the property pays off for an extremely long time.

Obviously, not everyone has the right amount of money, so for them, we suggest applying the Warren Buffett method and buying shares. Stocks themselves are considered high-risk assets, but the Omaha oracle teaches us not to speculate and buy business, not securities.

We are talking about reliable companies that confidently go through any crisis and consistently pay dividends.

In the long term, for five or more years there will certainly be an opportunity to get out of them as a good plus.

High Risk

We must understand that we are faced with an unusual crisis today because everything indicates a collapse of the global economy. And if we look at the United States, in the first quarter of this year, the country’s GDP fell by almost 5%. The last time such indicators were during the 2008 crisis. But today, the US Federal Reserve has already bought up 30% of the country’s economy to hold markets.

The issue is whether they have enough strength to prevent the stock market from falling to a new bottom.

To date, a reliable plan is to buy shares gradually in small parts.

If the United States will pull the stock market over the ears by injecting trillions of dollars, then we have already begun to enter the market, that is, we almost bought the bottom. But if the truth is on the side of the pessimists and there will be a second bottom, then according to this strategy, cheap stocks will be bought there. This will lower the entry threshold and, in the long term, investing from three years or more will provide a good income.

The main risk is that not all companies will survive this crisis. Therefore, it is logical to de-diversify the portfolio.

For the riskiest guys, you can advise cryptocurrencies. In light of the overload of printing machines of Central Banks around the world, confidence in national currencies is falling and this gives Bitcoin an excellent chance to prove itself as a new protective asset and an alternative means of payment.

Discuss

1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

/ Похожие записи