Best Investment Picks during the Pandemic
Thanks to the Covid-19 pandemic that impacted all aspects of life and business, investors had to think long and hard about their portfolio and strategy to minimize financial risks. Some forms of investment have become extremely risky, while others a safe haven. However, no matter where you’ll put our money it’s important to identify the risks that you could face. And remember, the higher the profit, the greater the risk, and vice versa.
Several investment options you should consider during a pandemic:
Gold
Gold, also known as a safe haven instrument, is one of the safest investments during a pandemic. It has a reasonably small risk and relatively stable price. Gold’s price also tends to continue to increase from time to time, so that when you sell it later you can get bigger profits.
There are several reasons that make investing in gold valuable. First, the value of gold tends to increase from year to year. This means, by investing in gold, your wealth will also automatically increase.
Second, if a country experiences a crisis, the gold exchange rate will skyrocket. This item’s exchange rate is not tied to the inflation rate and is actually in opposition to the crisis. The bigger the crises, the more expensive gold became. That’s why it’s best to buy gold when the price is low and sell it when it peak.
This leads us to the third reason, though gold does not generate cash flow, instead it gives you capital gains from changes in value from year to year.
Property
The next investment that we could consider is in property by buying, owning, managing, leasing and selling real estate to generate profit or profit.
Generally, investment in property is made when new construction is about to begin or since the very early stages when it’s still a barren plot of land. However, when the construction project finishes and you become an owner of a new accommodation you lease out, that’s when the investment return will start to trickle in.
Thanks to the Covid-19 many developers sold their property with a low price, thus it’s a good time to shop for your land asset.
Mutual Funds
Mutual funds are a great and safe investment instrument during a pandemic. It is also very suitable for those who have small capital and do not have much expertise in calculating investment risks.
Generally, mutual funds are managed by a professional investment manager and monitored by official authorities. In Indonesia, it is regulated by the Financial Services Authority (OJK), which ensures that investment management is carried out properly in accordance with the regulations.
The upside of investing in mutual funds are plenty. Among them is its flexibility. Even with limited funds, we can split our money into several accounts and even to several stock exchange securities companies. This way we can spread out money and minimize the risk should one account collapse.
Furthermore, mutual funds make it easier for investors to access the capital market. Analyzing good stocks to buy is not an easy job, it certainly requires the knowledge, skill and experience that most are not aware of. But thanks to the mutual fund manager, we can jump into the exciting stock market and entrust our account to the professional.
Another good point for mutual funds is time efficiency. By investing in mutual funds that are managed by a professional investment manager, investors do not have to constantly monitor their financial performance.
Government Bonds
Another great investment option is in Government Bonds or bonds issued by the government. There are several types of government bonds, but to make it simple, there are bonds issued with the country’s currency and another in a foreign currency. The second one is also known as International Bonds and usually has bigger return albeit with a bigger risk.
If you are a conservative type and are afraid of the investment dynamics that fluctuate drastically, then investing in government bonds might be for you. This form of investment is considered very secure because the guarantor is the government itself.
Moreover, bonds can be sold at any time before its maturity date and offer good yields depending on how long you hold it. If the bond price goes up, or you hold it for a long time, you will get an additional return.
Shares or stocks
Stock is an investment instrument in the form of purchasing a company’s share. This investment adheres to the principles of high risk, high return. It means that if we want to get a large return, the risk level that we may face is also big.
One of the benefits of investing in stocks that you can get is gain. As a company develops over time, it will usually be followed by an increase in the company’s stock price. A stock you bought today and five years later will have a very different price.
Another benefit in investing in stocks is dividends. Dividend is a distribution of profit for shareholders in accordance to the number of shares owned. When you get dividends, you are indirectly recognized as the owner of the company and are entitled to participate in the General Meeting of Shareholders.
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It’s very important to keep updating your options of investment. There could be new products, items or schemes that will be worthwhile investing in the long run.
Meanwhile, if you have already undergone previous investments, don’t forget to monitor it. By monitoring your investment performance, you can pinpoint the high and low performer. That way it will be easier to set further strategies and mitigate risk, the pandemic among it.
Happy investing!