Investments in the event of the crisis: how to work in the markets?
The global economy in 2019 are waiting for serious tests. In particular, the problems are provoked by the protectionist policy of the United States, because of which the “trade war” with China began. GDP growth in the Middle Kingdom has slowed, which will have an impact on trade across the planet. In such circumstances, the reasonable question arises where to invest money? The right investments in a crisis can make millions and even billions of dollars. What matters is a competent approach to work.
Investments in the event of the crisis: the most interesting assets
Donald Trump seems to have focused on embodying his election program. The current US president promised to revive his own production and “clear” the market of foreign goods. The fruits of this policy are observed now. The States of the last 40 years have had constant problems with the trading account and the balance of payments, which can be considered similar actions by Trump’s government justified.
However, tightening trade policy is a controversial method of solving problems. Countries subject to restrictions apply similar measures, which makes export difficult. The tax reform carried out in the United States only aggravated the budget deficit, and with it worsened the balance of payments.
In 2019, the market will closely monitor the United States and the country’s success in negotiations with partners. Therefore, the instability of quotations is obvious.
Moreover, the rise in the value of US government bonds is expected (due to the tightening of the FRS’s policy), which in turn attracts investors. However, the money for the securities they take from developing countries, getting rid of local assets. However, this year this mechanism may be violated.
Analysts predict a long-term decline in the USD against other currency notes. In particular, in 2019, Citibank experts expect the DXY index to deteriorate to 94 points, and by 2023, the figure could fall to 76, which is equivalent to a 20% reduction in price.
Despite the possible outflow of capital from developing countries, Citibank professionals consider this market to be the most interesting. Analysts are confident that corporate profits will grow at a rate higher than the world average. The greatest interest is China. Shares of the PRC market have seriously declined due to the trade war, but China’s GDP, despite the “trade wars,” will continue to grow. In 2019, it will increase by 6.4%.
Experts believe that European companies are also a good option. Their discount is 7% in relation to global values and 20% in relation to the United States. It is expected that here the pace of increasing corporate profits will be higher than the average for the world. As for the UK, neutrality prevails among experts. Attractive is the depreciation of the pound sterling, but Brexit and its possible consequences deter investors.
Whatever decisions an investor takes, in a crisis, compliance with investment rules is especially important. This is a diversification of assets, a correct assessment of the current situation in the economy and politics. No matter how tempting these or other options look, you need to remember to minimize the risks.