Investing during difficult times

Investing during difficult times

Recently the South African Finance minister Malusi Gigaba, in his maiden Medium-Term Budget Policy Statement, laid bare the extent of South Africa’s fiscal woes. It certainly painted a bleak picture of the state of South Africa’s economy. On a global scale though, the world economy is growing. There are political risks, as there always will be, but also revolutionary changes, like in the energy markets. The thing is, that when things are going badly, it affects the economic markets negatively, and then more opportunities open up.

Regardless of the times we go through, we are always in need of financial security.  It is something we think about more when faced with the cost of living during difficult financial times.  The truth is, whether the economy is on an up or downward spiral, the risks are always there.  Something that is profitable today might not be tomorrow – even if the market is strong.  It all comes down to you and your choices. Choosing to invest is your first step.

It’s not a case of ‘all-in or nothing’. Just as there is a risk in investing, there is a risk in not investing. Sean Cheng

Look for opportunity

We are used to looking at the world in a certain way but often when doing so we easily overlook something that might be of significant importance or even to our own benefit.  The same applies to the way we invest.  The truth is that there are always opportunities around us, more so during difficult financial times. Investors are looking to buy low, wait for improvement and sell at a higher price.  It is such opportunities that allow investors to compensate when investments are at a low. Spotting such investments is where the difficulty lies.  It is important to make smart educated decisions when investing in something new, but more often than not, is worth the risk.

If you are waiting for the right time to invest in the market, that time is now.

Diversity

It is a good idea to expand your portfolio during troubled times. The old adage, “don’t put all your eggs in one basket” is still true.  The idea of diversity in your investment means you reduce the risk of losing money on one investment or multiple investments in one field. It is better to invest small amounts in various options opposed to investing one lump sum in a single venture.

Taking the risk

There is no such thing as a risk-free investment and there will always be the possibility that any investment can have a negative financial result.  However, this does not mean that something is not worth the risk.  Do your homework, consult with advisors and make calculated decisions – the risk is often worth the reward.

Let’s start planning for your financial security together.  Contact us today.

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