And although this is not entirely true, since the term “crisis” in Chinese is “wei ji”, while “opportunity” is “ji hui”, it is true that Asians have this perception. A thought that is gambling data china phone number more difficult to find in the West, even though the results are always or almost always excellent.
A not so distant memory
March 12, 2020 went down in history as the darkest day for the Spanish stock market in history. In that fateful session, the Ibex 35 sank 14% to 6,390 points; but it would not be the only one. In the United States, the Dow Jones fell 9.99% and the Nasdaq 9.43%. Such a blow led a large number of investors, many of them inexperienced, to withdraw their money.
Others, however, decided to up the ante. In the following weeks, so-called insiders bought shares in their own companies. Meanwhile, many institutional funds also took advantage of the opportunity to fill their coffers with shares at a deep discount.
The result as the months passed is also well documented. In fact, summer had not yet ended when Wall Street was not only back in the black, but was projected to surpass historic highs. A milestone that became routine throughout 2021.
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How to invest in times of crisis?
What happened just two years ago should serve as an incentive for investors to view times of crisis in the stock market differently. Especially in difficult times, such as the current ones with the forecast of rising inflation . Although there are some more lessons to be learned, especially on how to invest in times of crisis to maximize profits.
And choosing the sectors that will benefit the most from these moments of crisis is particularly beneficial for our assets. During the pandemic, it was the technology sector that benefited the most. Later, the energy crisis would create new winners: oil, gas and electricity companies.
But you don't even need to be so good at it. Another easy resource to bet on during crises is gold , also known for being a safe haven asset. A good way to invest in gold is through an ETF, since it allows you to benefit from the price without having to physically own it. Thus, for example, Invesco Physical Gold, which can be purchased at inbestMe with very low commissions, offers a return of almost 7% so far this year.
Passive investment in times of crisis?
Although crises are windows of opportunity to achieve higher returns in the future, the idea of tracking every stock on the market is not always the best option. In fact, it is often a much better idea to opt for passive investment, that is, to hire products that track an index or real assets at a very low cost.
The reason behind this is simple: appreciation tends to occur across the entire sector, so there is no need to be so careful with one company . This can be seen, again, in what has happened recently. Thus, the vast majority of oil companies have appreciated in a similar way to what any ETF or index fund in the sector has done. But for a private investor, the second investment will probably have a higher return because the fees they have had to pay are much smaller .
In the end, under normal conditions, investors look for where to invest to seek future investments from companies with strong competitive advantages . But in times of crisis, and more thinking about the short term, it is better to bet on a passive product indexed to a winning sector than to gamble on one or another firm. That same thing could be happening now, so if you want to bet on the next winning horse, visit the inbestMe platform to get the most out of current prices along with very small commissions.
