COVID-19: Investing during a crisis
Socio-economic crises cause a universe of emotions that are difficult to stop. This, in addition to the own challenges that each one of them brings with it, makes any commercial dynamics that was stipulated or that is considered to be carried out unpredictable.
In terms of investment, difficult economic times are a challenge to intelligence. However, for those with a greater spirit of innovation, they could become a creative impulse to devise strategies that protect the business, or even grow it. The following reflections are focused on this.
Let’s start from the reality we live in. The COVID-19 pandemic has put the world on alert and there is already talk of an economic recession. Some experts, including people involved in mutual fund management, compare the current scenario to the global crisis of 2008, actually materialized in 2009 and 2010 and still very recent in the minds of all of us. Others, such as the Minister of the Economy of France, Bruno Le Maire, makes a simile with the “Great Depression”, the strongest economic blow of the 20th century, derived from a chain of events that caused a great fall in the Stock Market of New York in 1929.
Hearing the latter is worrisome, above all, knowing that the “Great Depression” has been the global economic crisis that lasted the longest, lasting for more than a decade. However, the times are different; We live in a world where technology allows us to see beyond the obvious and information is the main protagonist.
Therefore, if we use these resources well, we will not only be able to get out of this crisis together, but with smart moves we could even make the right investments. In addition, contrary to what happened in 2008, when markets and specialists took time to realize the magnitude of what affected us, with COVID-19 we have reacted very in time and that is why the impact is expected to be of less duration and easier recovery.
The big question is: where to invest and how?
Investing in times of crisis merits well-thought-out actions, avoiding rainfall and, especially, being aware of the risks that the crisis itself poses for our capital, as well as the vulnerability that a volatile market brings with it in which decisions are not always made. they are taken from totally rational and well-informed perspectives, but under the influence of accelerated opportunity and emotional intuition, perhaps with past experiences as a guide.
With the above clear, it is possible to open up the creative spectrum and think about investing in solutions that seem appropriate in the current crisis. Some areas of investment that could be considered are:
It is the “old reliable” of investments. It is no secret that investments in gold are among the most stable. This is evident when we identify the increase that its value has had in recent months, reaching 1,700 dollars per ounce in April 2020. According to the United States Federal Reserve, the estimate of the value of gold ranges from 2,000 to 3,000 dollars per ounce. by the end of 2021.
As this is a health crisis, the pharmaceutical sector has been one of the least affected. In this sense, those innovation initiatives that, together with technology, contribute to generating necessary advances, with regard to state defenses in the health sector, in the face of the pandemic, stand out. It is also worth considering here other lines that are not necessarily that of drugs. The wellness industry has become a great opportunity that has already been taking positions as an attractive investment.
Companies like Amazon and Netflix, as well as some startups aimed at teleworking solutions, have remained stable during lockdown. In some cases, such as that of the Zoom platform, the pandemic has served as a vindication of the philosophy of these companies, which had been warning about the extensive facilities they offer from the digital world.
Although the aforementioned sectors are the most prominent at this time, the risk posed by a pandemic is naturally much greater than it would be in a more “normal” scenario. Given this, the steps to be taken should be carefully thought out, as any mistake could cause great losses.
Economic crises, for some, come in the form of an opportunity for growth and business stability. Above all, for those who act with impulse control and at the same time dare to be creative and innovate.