As you may have read in our latest interview with Mukarram Mawjood, our head trader, the equities markets aren't looking great right now. Mukarram cites many reasons for this: the insensible volatility in the market, the crashing of the US dollar through rash printing of more money, and the general uncertainty of the future. Though he predicted the equity markets having a strong correction before COVID was even a thing, COVID definitely has a hand in these volatilities, but the upcoming US elections and trade disputes with China are other large events that cannot be ignored. With all of these issues at hand, we may ask ourselves just how can we plan for the future and make our money work for us? Fortunately, Mukarram has four tips to help take advantage of the present at hand.
1- Do Nothing
This may seem counterintuitive at first, how can I grow my money by doing nothing, but it is perhaps the safest advice. What is the worst that can happen if you let your money sit in the bank at the moment? You don't make a growth for a couple quarters? Well it is better than losing on a bad investment. Because the equity markets are acting like two year old children throwing tantrums, it can be very challenging to form plans to enter and exit the markets safely and effectively. What may have seemed to be a sure bet is now suddenly losing you tons of money, and that is way worse than simply not growing your money for a time. When in doubt, there is nothing better than money in the bank.
2- Invest in Hard Assets like Physical Precious Metals
When the equity markets are misbehaving, hard assets like gold and silver usually perform well. This is because people like having something tangible to invest in. Having actual physical precious metals means you have something more than just an esoteric stock, you have an actual commodity that doesn't lose value. Mukarram believes this a great time to enter the gold or silver market. “Gold hit a new record of all time just a couple weeks ago, but don't let that discourage you, there is still plenty of room for it to grow and silver is also just starting to join it.” He reminds us that from 2008-2011 the gold and silver markets reached records as well from the mortgage crisis, so just imagine the potential 2020 and beyond has!
3- Look into Foreign Investment
Though Mukarram was very critical of the US government printing more money and driving down the value of the US dollar, that doesn't mean that all currencies are suffering. He encouraged us to look into investment overseas. Investing in real estate or properties overseas could be a great opportunity right now! He has already seen several colleagues make sound and intriguing investments at the beginning of 2020 and he is convinced that there are many others to be had. Start researching vacation homes, properties for sale, land for sale and other things that interest you in foreign development and see where it takes you. There is a world of investment opportunity outside of the stock market for those who know how to look for it.
4- Research and Enter Equities Carefully
Ok so I know we have said how much the equity markets look volatile but what if you really want to get in there? Are there things that are just really tempting you? Low oil refineries, or tourism stocks, COVID related treatments or care companies? All of these things can play a siren's song to those who want to take risks but while we cannot tell you not to do something, we can offer some words of caution. Indeed there will be a few stocks that were low at this time and will shoot up when the world comes back. It may even be something you watched and will kick yourself for, for not getting into but be warned, hindsight is 20/20 and for every stock you see performing great there are 10 others that may sink into bearish trends as a result of COVID. Before you invest in any of these tempting trades be sure you research them extensively, the history of the company and performance, what are they doing and how have they already reacted to COVID, what are the futures of these businesses? There is a very real risk that some industries will never return to what they were. In regards to vaccines and other treatments surrounding COVID, know that there is a lot of speculation and overbuying the market right now and likely only one or two will end up on top. Keeping up with news and information is critical to make these investments work and they still might burn you. Like anything with a chance to win big, the risk to lose is also there and may not be worth it for everyone to take.
And there you have it, four tips to help you navigate your investments for 2020, but it doesn't end there! Be sure to check in with us weekly for more tips in investing, wellness and health, till next time! Please reach out to us at info@bullionite.com with any questions you may have or if you have a topic you want discussed.