Investing in Times of Global Distress

In the times of global distress or economic uncertainty, no Investor feels comfortable to Invest. It is inevitable, in such situations, that the share prices suffer a hit. But this is no reason for the Investors to panic. In fact such times of global distress can give you an opportunity to review your portfolio and make corrections so as to position it to weather the storms that may lie ahead.

Some incremental and sensible changes can help you in steering ahead in difficult times. Different classes of assets may perform well or poorly at different times. It is a very good idea to diversify your portfolio and include a wide range of assets in your portfolio. Even if one asset class performs badly, there are chances of others doing well and compensating for the former. Also, in times of global distress, people look for the perceived safety of cash. But this strategy can prove to be risky as the markets being highly volatile can fall and recover unexpectedly. Moreover, the purchasing power of cash is easily eroded by Inflation over time.

During times of Economic Distress, the financially strong companies are able to sail smoothly as compared to debt-laden companies. You can use this time to Identify the stronger companies and make your Investment plan accordingly .One must therefore act with patience and avoid hasty decisions based on predictions which may be untrue. You should always look your Investments at the long run prospects.

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