Investment strategies to follow through the Russia - Ukraine conflict to protect your investments
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Any situation that is between two nations or a nation, in general, affects their currency, and therefore the stock and currency market is affected as well. The value of their currency might go up or go down significantly, and this might be, to the extremes, a good thing or a bad thing for an investor. The volatility of the money markets is making investors fear and hope for the best as they are not sure what turn the market will take and hence their investment. With the recent victims being Russia and Ukraine, here are a few strategies that investors can use to secure their investments.
Since the conflict might lead to a recession, it may not be an excellent time to take chances and huge risks with your investments. The most important strategy at this point would be to play it safe, which involves avoiding companies that have high leverage and speculation. This goes for investing large amounts in money markets like the forex and safer investments like buying stocks.
Invest in consumer products
Since there is uncertainty on what turn the currency will take, it is essential to note that Russia is one of the biggest distributors of oil and gas, and it has a significant impact on the cost of most products. Consumer products do not change in their consumption. Therefore it would be a viable idea to secure your investments by dealing with more consumer products than other options of assets that the price might fluctuate with time.
Diversify your investments
Putting all your eggs in one basket might cost you a lot more. Do not pile all or a large amount of your investment in one field, especially the money market, which is very volatile, as you would lose even your capital. Even when it comes to investing in consumer products, it may take a negative turn on you. Since the turn of events is unpredictable, diversify across several industries, which will assist in protecting you from loss once the value goes up. Diversify your liquid and physical assets by buying shares in different companies and bonds.
Do your research
Before taking up any investment, do your due diligence doing your research. If you want to invest in forex, for example, there has been a reported significant decline in the indices, which have gone down by over fourteen per cent as written by various money markets representatives. With an increase in oil prices and oil-based commodities, some currencies like the Canadian dollar and Norwegian Krone, compared to other currencies for countries known to distribute things like Japan, have deteriorated. The Euro lost its value against the Russian ruble by about a percentage of seven and a percentage of eight against the Canadian dollar. During this time, it might be wise to invest with a broker that gives higher leverage and will provide you with more security with your investment. In this case, you might want to try out CFD trading with AvaTrade, which offers higher leverage and, therefore, you might feel some level of security while trading.