Where Should You Invest in Volatile Environments?

What if we see more variants of COVID-19 develop? What if rising energy prices cause a fuel crisis? What if war breaks out in the Middle East? Those are a lot of ifs, but they are possibilities, and if they happen, where are the best places to have your money invested?

You may automatically think of instruments backed by the full faith and credit of the US government, such as US Treasuries, or FDIC-insured savings vehicles, such as fixed-rate CDs and savings accounts.

But these aren’t necessarily the best options, because investors in them are likely to see inflation eat away at their investment returns.

What are some other investment options for volatile times? There are two ways to approach market volatility. You can invest in securities that tend to hold their value regardless of market conditions, or you can try to take advantage of market volatility by investing in securities that are likely to do well because of the risks the world is facing.

If you prefer the first route, you might consider gold or real estate. Historically, gold has been considered a “safe haven” in times of economic, financial and geopolitical instability. And while real estate prices can fluctuate, they’re backed by something tangible: a property that you can live in or rent out if you cannot sell it.

But what if you want to invest offensively? In this case, your options are limited only by your creativity.

For example, if you think tensions in the Middle East might lead to rising energy prices, you could consider investing in energy stocks, such as those in the MSCI World Energy Index.

If you need help determining what kinds of investments meet your needs and risk tolerance in volatile times, we can provide additional input. Please call or email us.