In any time of crisis, investors understandably look to those investments that fare better during periods of uncertainty. But, if you are new to investing or still unsure as to what investments farewell, it can be difficult making that right choice here.
For many, investing during a time of crisis can often be off-putting. As a result, many shy away from it until the markets have weathered the storm. Yet, it does not have to be this way. There are indeed many investment types that you can turn to that are considered more secure. Here we recommend five investments that are a safer option during uncertain times.
1. Low-Risk Investments
During a time of crisis, there are potential companies whereby investing in them is considered a safer decision. These include those companies that boast a good cash flow, as they make for a low debt option. Low-risk investments are ideal for those that are looking to avoid significant risks during uncertain times – but still want to continue to invest. A low-risk investment here should avoid those companies that are thought to be speculative or higher leveraged.
2. Financial Betting
Also referred to as spread betting, financial betting is a good investment choice during uncertain times. This is primarily because this form of investing allows you to take advantage of those markets that are not just rising, but ultimately those that are also falling. A fascinating strategy, financial betting, is considered by many as an excellent alternative during times of crisis. This is because it doesn’t require you to own any of the assets that you’re betting on. For this reason, you can borrow money to make bets on commodity or stock as you choose, with many to be found on this page.
3. Dividend Stocks
Yet again, a means of investing which sees you looking to a company, dividend stocks offer an excellent form of passive income. This method simply requires you to invest in a company to essentially receive a portion of their earnings. Once again, the key here is to look for those companies that you know to be the more reliable of choices. This allows you to continue to err on the side of caution throughout the current crisis. Those companies that show proof of increased financial pay-out for a reliable number of years are good options here. The same goes for those that boast of low debt-to-equity ratios.
4. Real Estate Investments
Often considered by many investors to be the safer choice, real estate investment is usually not affected by a major crisis as other investment types are. In fact, when a crisis, such as a recession hits, it is natural to witness home values dropping. Therefore, you can, in fact, invest here by buying at lower prices, then selling on at a higher profit after the crisis has subsided. Yet, during the more uncertain times, you can then rent out such property, all the while generating yet another passive income avenue, which is all the more reliable during such periods.
5. Consumer Staples Investing
Finally, a more secure type of investment, but one often overlooked during times of crisis is that involving consumer staples or those essential items. This means investing in the equity market in those typical items that people tend to need and, of course, buy, regardless of their current financial situation. This usually includes items such as food and beverage but can also focus on tobacco along with specific household goods.
Final Thoughts on Investing During Times of Crisis
Ultimately, during any time of crisis, the best piece of advice when investing is to invest wisely! Now is not the time for substantial, risky investments. Yet, that does not mean that investing activity needs to be put on hold.
In fact, for many, such uncertainty can often present an entirely new investment option and one you could well discover yourself doing considerably well from.
It may simply require you to look to both different companies and, indeed, different industry types than usual.
However, it is still possible to find potentially secure investments during the more challenging of times – you merely need to change your initial approach.
Featured image: TheEconomicTimes