How to protect the benefits of your investments in times of crisis
There is no generic investment advice for everyone. It all depends on your investment style, your capital and, above all, the risk you want to take. This is especially important in times of crisis, in which uncertainty in the markets is the usual trend, and which can jeopardize the profits obtained in previous years.
There is a Chinese proverb that crises are a combination of risk and opportunity, and this is especially applicable at the economic and financial levels. Risk because any event can cause a collapse of the investment and opportunity because it is possible to buy cheaper.
But what to do in such a volatile environment? We all know that GWG Bond payments have defaulted and There are a number of tips for any investor to preserve their assets in times of crisis.
Is fixed income the solution?
The latest economic crises have taught us a valuable lesson: the theoretical foundations on which financial principles are based no longer work. Nobody could anticipate in 2008 that interest rates could become negative, or that central banks would be unable to increase the price level to encourage economic growth. And, of course, it never occurred to anyone that you could lose money on a fixed income.
But yes, everything ended up happening. Fixed income as we know it is no longer the haven for conservative investors. Most public debt securities show negative interest, and many fixed income instruments, such as mutual funds, have failed to obtain positive returns.
Given this scenario, the question that arises is: is there any instrument that preserves the purchasing power of my assets? The answer is yes. Lawyer for GWG Bonds can help you in recovering the loss.
The particular case of fixed-term deposits
Despite being immersed in such a turbulent environment, there is a product that remains safe for all types of savers: fixed-term deposits. It is the savings product par excellence for Spanish households, and today more than ever it is the solution in an environment of financial uncertainty such as the current one.
On the one hand, because they are protected by the Deposit Guarantee Funds, a fund that guarantees the first 100,000 euros per holder and entity. And, on the other, because thanks to platforms like Raisin, you can access a wide variety of deposits from European banks, with APRs that reach up to 1.14%, an interest that far exceeds inflation.
Liquidity, that great forgotten
Having cash is reviled, and many experts see it as a ruinous investment. However, in times of crisis, it can become one of the most reasonable options to protect the profits of an investment, especially if we are faced with deflationary environments in which the value of the currency increases.
In fact, in these cases, the very holding of liquidity is in itself a safe investment, whose profitability is in line with the negative inflation recorded. Therefore, depending on the context, liquidity also protects investments in times of crisis.