The most important question that people who have some money in their hands have been researching the most lately is what to invest in during the crisis . The most important reason why this question is asked very often and a solution is sought is due to the difficult economic conditions we are in.
I am here with an article in which I explain how you can evaluate your savings due to the worsening financial conditions.
I think this content will be very useful for those who are looking for answers to the questions of what to invest in in 2022 and what to invest in the long term . However, I would like to remind you that you should not perceive the information I have given here as 2022 investment advice .
When you read the article, you will have learned the answers to questions such as which is the best investment tool in economic crisis , what should be invested in devaluation and is it possible to invest in times of crisis .
Those who seek the answer to the question of what to invest in during the crisis should primarily aim not to succumb to inflation and to provide returns above inflation.
Come on, let’s take a look at how you should not succumb to inflation. But first, let’s talk briefly about what is the economic crisis and what are the causes and consequences of the economic crisis.
What is the Economic Crisis?
We can give several different answers to the question of what is an economic crisis :
- It is a period in an economic cycle where an economy faces difficulties for a long time.
- It is a situation in which a country’s economy experiences a sudden downturn.
- It is a period of scarcity in the production, marketing and consumption of goods and services.
- Shocking economic events that occur suddenly affect both the government and companies negatively.
- A sharp deterioration in the economic situation of the country was manifested by a significant decrease in production; violation of existing relations of production, bankruptcy of enterprises and increased unemployment.
The definitions I have given above explain the answer and the reasons for the question of what an economic crisis means . Now let’s give a brief information about the causes of the economic crisis .
What are the Causes of the Economic Crisis?
An economic crisis can have more than one cause. In general, a crisis can occur if institutions or financial assets are overvalued and can be exacerbated by changing investor behavior.
For example, an increase in the number of assets as a result of the high demand for an asset may cause the prices of that asset to decrease. This can cause individuals to sell their assets too cheaply or to withdraw their savings.
Causes of the economic crisis:
- Systemic failures
- unpredictable or uncontrollable human behavior
- Don’t take too many risks
- Regulatory deficiencies or failures
- A coronavirus-like outbreak
This and many other reasons can cause economic crises. Each cause may have different effects on the economy.
Now let ‘s examine the consequences of the economic crisis together.
What are the Consequences of the Economic Crisis?
Economic crises can have devastating effects. Although measures are taken for economic crises in some situations, the measures taken in unexpected situations may lose their effect.
We can show the best example of this, the coronavirus epidemic. So what are the consequences of the economic crisis?
Consequences of the economic crisis:
- Unemployment rises.
- Working wages go down.
- The external debt of the state increases.
- Turkish lira depreciates in exchange rate.
- Living standards fall.
- As purchasing power decreases, payments increase.
- Social capital decreases.
- Income inequality occurs.
The consequences of economic crises may vary depending on the magnitude of the crisis. However, as citizens, we are most affected by the most economic crises. That’s why we need to invest and secure our future.
So, is it possible to turn the crisis into an opportunity? What are the investments to be made in the economic crisis ? What should a small investor invest in ? If you are ready, let’s move on to the section where we will give answers to these questions.
Which is the Best Investment Tool in an Economic Crisis?
Many investors are wondering which is the best investment tool in the economic crisis . The primary aim of those who seek the answer to the question of what to invest in during the crisis should be to provide a return above inflation. Turning to an investment tool that will succumb to inflation can be nothing more than a waste of money.
There is nothing more natural than wanting to turn the economic crisis into an opportunity and evaluate your savings. There are many examples of this in history. Most of the companies that are currently large have turned crisis periods into opportunities. So, which is the best investment tool in the economic crisis?
The best investment tool in the economic crisis:
- silver investment
- gold investment
- Stocks investment
- Treasury bills investment
- Commodities investment
- real estate investment
- dividend investment
- Currency investment
I would like to give brief information about the best investment tool in the economic crisis that I have given above .
Silver is one of the best investment tools that I can recommend to people who do research on what to invest in during the crisis . I would like to point out that recently, investors have shown great interest in silver, whose value has just been realized.
For example, silver, which was traded at 3 TL per gram at the beginning of January 2020, increased to 10 TL as of January 2022. According to analysts, this figure is thought to rise even higher.
If a person asking where to invest had bought 30,000 TL worth of silver in January 2020, he would now have 100,000 TL. When we look at a time frame of 2 years, we can say that this investment is a very profitable investment. Silver is a sensible investment for a long-term investment.
Generally recommended for those who are looking for the answer to the question of what to invest in in the long run , gold continues to be the best investment tool in the economic crisis . When we examine the price chart of gold especially for the last 10 years, we can see that it provides very high returns to its investors.
The fact that gold is seen as an investment tool that likes an uneasy environment causes its value to increase significantly, especially during crisis periods. We can say that the sudden rises that we have seen in gold recently prove this statement that I have said.
A person who invested 7,000 TL in grams of gold from 70 TL in January 2011, 10 years ago, would have saved more than 800,000 TL in January 2022.
As you can see, those who research what to invest in the long term or who say what to invest in during the crisis may turn to gold.
3. Stock Exchange
Another recommendation for those who are looking for the answer to the question of what to invest in 2022 or what to invest in times of crisis is the stock market. Especially in times of crisis, some stock market stocks can be seen as investment opportunities. You can have very serious returns in exiting the crisis period.
Of course, in order to achieve this, you have to research a lot and invest in the right stocks. For example, since curfews were declared during the pandemic process, serious increases were experienced in food and market shares.
While many stocks saw bottoms, food stocks experienced significant price increases. Investors looking for an answer to the question of what to invest in during the crisis may turn to the stock market.
One of the most popular investment instruments of recent times is the dollar, as you can imagine. Especially in recent years, the depreciation of TL has caused the dollar exchange rate to rise.
In fact, this situation is related to the economy package implemented in Turkey. Due to the reduction in interest rates, the Turkish lira depreciated against most major currencies.
The dollar prices, which were at the level of 5.90 in 2020, have recently increased to the levels of 18 TL.
If you’re wondering what to invest in in the long run or what a small investor should invest in, I can recommend you turn to dollars.
Investing in dividend stocks can be a great way to earn passive income. When comparing dividend stocks, some experts say it can be a very sensible investment to look for companies with low debt-equity ratios and strong balance sheets.
Cryptocurrencies are shown as one of the most popular investment tools of recent times. Cryptocurrencies previously did not give much confidence to investors and were ignored. As you know, the first emergence of cryptocurrencies was with bitcoin.
When we look at the price of Bitcoin in 2015, it was almost equal to 1000 TL. A person who had 1 bitcoin at the time could now have savings of more than 600,000 TL.
Forex is one of the best investment tool recommendations that can be given to those who are wondering what to invest in, both large investors and small investors. Even if you have very little money in Forex, you can increase your capital by leveraged transactions .
Thanks to low spreads , you do not have to bear high transaction costs. In addition, you can trade for 5 days and 24 hours and evaluate investment opportunities.
Of course, for this you need to open an account with a reliable forex company. Most forex companies offer micro account option for low-budget traders. In this way, you can trade even in very low lots. If you are looking for short-term investment advice , you can learn how to trade in forex and follow the market and turn to forex.
What to Invest in Devaluation?
You have learned about what to invest in times of economic crisis. So what to invest in devaluation? First of all , let’s answer the question of what is devaluation , or in other words, what does devaluation mean .
In fixed exchange rate systems, the reduction of the foreign purchasing power of the national currency of the country with a balance of payments deficit, by a decision taken by the government, is called devaluation. In other words, devaluation is the depreciation of the official currency of a state against the currencies of other countries.
It is not right for me to give investment advice or be investment advice in such periods. Because it is not clear what will happen. That’s why you can decide which is the best investment tool in the economic crisis by measuring yourself and your capital.
What Should a Small Investor Invest in?
When small investors come to evaluate their capital, they are wondering what to invest in right now. There is no clear answer to this. Economic conditions and investment instruments may vary in each period.
Well, let’s evaluate today’s conditions. What should a small investor invest in?
What small investor should invest in:
- Foreign currency
As you can see, there are many investment objectives that small investors can evaluate based on their experience, capital and character. Those who wonder what small investor should invest in can research these investment objectives and choose the most suitable one for them. At this point , I recommend you to read my article on investing with little money .
To sum up, there is no requirement that no investment is made in times of crisis . In fact, the secret is to read the market well and turn the crisis into an opportunity. If you are currently researching what to invest in, I suggest you choose financial investment instruments that can turn the crisis into an opportunity.
So , what are your suggestions for solutions on what to invest in during the crisis ? Don’t forget to let me know in the comments section.