The Ukrainian conflict has shaken financial markets violently in recent weeks, and volatility is not over yet, despite the recent recovery in European stock market indices such as CAC 40 and DAX 40.
Therefore, many investors and traders are wondering how to invest their money and what is the best investment to protect their capital while taking advantage of the new opportunities offered by this war. ..
So how do you invest money in times of war? Do you need to change your strategy to adapt to this new environment? What is the best investment in these uncertain times?
Here are some ideas for making a better investment today.
What is the overall market situation (Europe vs. USA)?
All US indices fell by just over 3% in February as heightened military tensions between Ukraine and Russia led to sharp rises in prices for many commodities and a series of sanctions against Russia.
The European index was much more affected because its exposure to Russia was greater than that of US companies. For example, Eurostocks 50 lost almost 6% last month.
However, some internationally exposed US companies, such as Cisco Systems, Apple, PepsiCo, McDonald’s, Philip Morris International, Microsoft, Johnson & Johnson, and Boeing Co, are either doing significant business in Russia or majoring in Russia. We consider it a growing market.
Recently, the European index rebounded and increased overall in March, while the US index remained nearly stable over the same period. But uncertainty should continue to weigh on the stock market until the situation in Ukraine is resolved and the conflict is not over.
Therefore, it is important to carefully track the news about the development of the conflict in order to identify the best investment.
The establishment and consequences of many people should be noted, even when the conflict is over. Sanctions against Russia As for cash flow movements, performance, inflation and economic growth remain uncertain.
Do I need to change my investment after poor profitability performance?
How you invest your money in the face of new market conditions depends entirely on your financial goals and your investment style.
If you are investing in the long term, the investment period is several years, so a market downturn will not lead to a major sale of all devaluated assets. You must understand how the impact of the crisis will affect the development of the company in your portfolio and try to determine which is the best investment accordingly.
Therefore, it is important not to panic.
However, you can rebalance and rebalance your portfolio to take advantage of the new opportunities and better investments described in the next part. Recent price cuts have also been a great opportunity to include the assets you want to include in your portfolio and are now cheaper.
If you are an active trader (scalping or Day For example, trading) and market volatility may take advantage of many investment opportunities that emerge in a very short period of time. However, to protect your money from this increase in volatility, you need to use stricter money management rules.
What kind of investment opportunities will you have?
Certain sectors of activity can be successful and can take advantage of the war between Ukraine and Russia to make better investments.
The defense, weapons and cybersecurity sectors are now benefiting from eastern military tensions. They may continue to prosper, especially with increasing military spending in various European economies such as Germany, Italy and France.
With rising energy prices such as oil and natural gas, the renewable energy sector can take advantage of this desire of European countries to reduce their reliance on a single source of energy and accelerate their energy transition.
The luxury sector may decline in the near future, but may recover with the end of the conflict (on March 15, the European Union banned the export of luxury goods to Russia).
After dealing with supply chain disruptions and declining sales with Covid-19, the European and US automotive industries have lost their place since the beginning of the year. Still, if certain companies appear to outperform the market over time, these companies can be long-term bets.
Finally, if your risk tolerance is high, you can consider the crypto market and invest money, especially Bitcoin.
What is the safest investment during the war?
Depending on the investor’s profile, some consider the best investment in a war or crisis to be one that can protect savings, even if it is barely available like a bank’s books.
You can also look to safe shelters such as gold and invest in real estate and life insurance policies.
To invest your money, you can also focus on specific areas of activity that are resistant during the war and therefore represent better investments, such as defense stocks in the areas of community services, health, or food. Is possible.