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INVESTMENT STRATEGY TO ADOPT IN TIMES OF FINANCIAL CRISIS

Updated on January 9, 2011

Investment is one vehicle that moves the whole world forward. Without investment, the world would stand still or better still go back to the Stone Age when men and women live in the dark. For us to avoid this, we must have a strategy to take care of the investing aspect of all that we do.

Investing in the process of planting our resources now in order for the resources to bear fruit sometimes in the future that will serve as a reward for our investment. This is to say that the fruit (investment) we plant now must be planted in a fertile land if we are to reap from our labour. If this assertion holds, it then means that investments are under threat in time of financial crisis and needs to be protected with a tested and proven formula.

Collection of those actions that we take to ensure the safety of our investment in tight financial situation is what is known as investment strategy.

  • Invest in a secure investment vehicle: there is no point putting you more in an investment vehicle that will not safeguard the capital of a business. The capital of a business is the initial money used to set up a business. In the case of investment, it is that portion of money used to finance a project from the beginning. One of the principal causes of the economic meltdown is the lax control exercised by responsible officials over the security of invested funds in the real sector of the US economy.

In all that you do, try as much as you can to protect your initial investment- very important! Invest in projects that have the ability of absorbing the inflationary effect of the economy. If you must invest in stocks, make sure the company is dealing on goods that are necessities. This is to ensure that consumers of such goods will not react negatively at any slight price increment, thereby making the company profitable and remaining profitable. Shares of profitable businesses grow in value even in the face of economic hard times.

  • Get financial management knowledge: financial intelligence is a must have skill if you really want to survive this harsh economy of investment that is even getting worse by the day as corporate bodies try to make ends meet. Your primary skill of specialty is immaterial in this regard. You cannot say because you are a lawyer or a medical doctor and neglect to acquire the basic financial education that will help you manage your finances on the minimal. Buying one or two text on financial management will help you a lot.
  • See an exit route before ever investing: make sure you are clear with the exit opportunity presented by any investment you are making before committing your money. Wise investors take time to properly analyse investment proposals. If you don’t have this skill, learn it!

 

  • Invest in the industry you are conversant with: there is no hard and fast rule here, if you are not knowledgeable enough in any area of business and which to make investment in that field, simply hire an expert in that field.

As simple as the above investment strategies maybe, they are very effective in time of financial crisis.

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