Is it worth starting to invest during a pandemic and crisis

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

The expert shares ideas on how to invest money wisely, depending on the amount.

How investing during a crisis and a pandemic is different

The instruments for investing money have remained the same. But the conditions in which people have to invest have changed.

Less savings

Or the dynamics of their increase has decreased. The pandemic has dealt a significant blow to the economy. Many industries have practically ceased to operate. All this was preceded by a decline in oil prices, which caused currency surges. And if there is no free money, there is no investment.

An atmosphere of uncertainty persists

So far, no one can say what will happen next and when the pandemic will end. Therefore, you have to carefully calculate the risks and consequences of financial decisions. Even if you managed to save your savings, you have to reconsider your attitude towards them. For example, if the situation deteriorates in the near future, money may be needed. Hence, it is better to save them, and not to invest somewhere.

Trust in financial institutions is falling

And not only to them, which is logical in a situation where no one can guarantee anything. Hence, this can also alienate investors.

Scammers become active

Taking advantage of panic and uncertainty, deceivers come up with new schemes and begin to actively use old ones. In times of crisis, it is easy for a desperate person to believe in promises to get rich with minimal investment, and then lose everything. At the same time, more cautious people begin to doubt the proposals even more.

Is it worth investing in times of crisis and pandemic?

Personal finance and investment management expert Igor Faynman believes yes. Even if you have never done this, the start can not be postponed.

Igor Faynman expert in personal finance and investment management

It is best to start right away with practice: take the first steps and have a sensory experience. You need to start with small amounts and increase them only when you understand the work of the investment itself.

At the same time, the rules are the same for 15 thousand rubles, that for 100 million dollars. The basic principles are always based on risk assessment and diversification of invested funds. It is important not to keep all your eggs in one basket and use different investment instruments. At the same time, it is better to avoid short-term speculative investments. As a rule, they do not bring income, while you also risk losing your investment.

Where to start if you've never invested before

Actions will largely depend on the amount you are willing to invest.

If you have less than 10 thousand rubles

This is a nanoinvestment, the income from which is unlikely to please, but 10 thousand is better than nothing. According to Fineman, earlier the most comfortable instrument for such investments was a bank deposit. But in recent years, rates have been falling and the level of income from deposits lags behind real inflation. It's too early to invest in the stock market: the broker's commission will simply eat up the lion's share of the profit.

Having 10 thousand rubles on hand, the most correct thing is to just keep saving. And already with a larger amount to start the investment process.

Igor Faynman

If you have 10-25 thousand rubles

It is still early to enter the stock market, but it is possible to start buying investment coins, currencies, OMC or ETFs.

An impersonal metal account (OMC) is an investment option in “paper gold”. You buy a certain amount of virtual metal and expect that it will rise in price in the future. The CHI can be replenished, partially withdrawn from it or closed at any time without penalties and loss of accumulated income.

ETF is a fund whose investment units can be bought on an exchange. They are formed from securities in maximum accordance with one or another stock index.

With such an amount, you cannot count on a fixed income, but there is an opportunity to protect your savings from inflation and receive income from capital growth.

Igor Faynman

If you have 25-50 thousand rubles

You can form a bond portfolio. The cost of one bond is on average about 1,000 rubles. For maximum diversification, you can buy securities of 10 companies for 5 thousand rubles.

On bonds, the buyer receives a fixed percentage at a certain time. This is a classic "safe haven" for an investor, providing reasonable stable returns. Moreover, there are both low-risk bonds (OFZ with a yield of 5-6% per annum) and high-yield (risky with an income of 12-15% per annum) to choose from.

If you have 50-100 thousand rubles

Pay attention to the dividend stock market. A fixed dividend will help mitigate the risk of falling securities prices.

Since this is a part of the profit of a joint-stock company, which is annually distributed among shareholders, it is advisable to invest in reliable and profitable companies.

Igor Faynman

In America, there is a term "dividend aristocrats." These are the companies that have consistently paid dividends over the past 25 years and, moreover, are increasing their size from year to year. In Russia, this market is just emerging, but there are already a sufficient number of companies that regularly pay dividends and allow the investor to generate a constant cash flow.