Investing in times of crisis — 12 tips | Предприниматель

Investing in times of crisis — 12 tips

Experts share tips investment at a time when the usual schemes lose their effectiveness.

1. If you bought a long time do not keep

To date, more risky is to buy stocks and other securities, hoping not to sell them for a long time. This mechanism works only in a stable market growth. As the economist Gary Shilling, it is not necessary to be a carefree traveler when to be partisan in the jungle. Therefore, you should very closely follow the existing assets, and in case of a fall, immediately sell them in time to buy assets, rising in price.

2. Do not count on diversification

It should be recalled 2007-2009 crisis, when the S & P 500 fell 57%, before which failed to resist the assets and sectors of a class. In this case, you need to remember Warren Buffett, who once said that diversification does not make any sense to those who know what to do. According to him, “diversification – is the protection of misunderstanding.” You can diversify, but do not forget that a large number of shares and assets do not guarantee you protection, they will provide only average results.

3. Do not fall into the trap of indicators

Many investors are fond of fundamental analysis and investing in securities often search for these companies, in which the coefficient of P / E (price / earnings) and P / B (price / book value) are below the average. And this is a big mistake, because it was such indicators is largely caused the financial crisis.

4. Volatility can generate income

Do not forget about volatility. According to the Chicago Board Options Exchange in the average daily value of the index has almost doubled since the mid-2000s. As for the S & P 500, in 2011, its value varied by more than 1% during the 75 trading days. You can use the volatility to increase its income! Enough to buy when there are abrupt and even irrational price changes. You can transfer funds to those funds that are able to earn on volatility.

5. Pay attention to the policy

Today, the political changes in the country could affect the movement of shares even more than the increase in capital of the company. Recall how in August 2011, due to the fact that the whole world was confined to the situation in the U.S. Congress, which could pull the country out of debt default, collapsed a huge number of blue chips. Fundamental factors are always important, but you need to watch and politics.

6. Look at the dividend

According to the research, if we talk about the long term, stocks that pay dividends far predominantly to purchase, than companies that do not pay them, and also have a lower volatility. Recently, companies have begun to give this issue more attention. For example, Intel began paying 3.5%, and most recently, Apple announced that for the first time in many years, will pay dividends in the quarter. It should take the money.

7. No need to beat the index of

Probably, your broker will not just tell you about the need to beat the index. Most often say to persuade someone to buy assets that provide income. But why try to beat the S & P 500, if you can just send their forces for a particular income? If you want to achieve their goals – no matter whether it would be entering a college or carefree old age – that use this approach.

8. First, decide how to sell and then buy

Most investment advice designed to teach you how, what and when to buy. But in terms of instability, more likely to be better for you to decide on how and when you will sell what they bought. As advised by Charles Rotblud who is Editor of AAII (American Association of Individual Investors), you first need to define the conditions under which you will be able to sell the stock before you buy them. This will help avoid losses as in a quick sale, as well as in long-term holding of shares.

9. Take for an example of successful investors

Feel free to take as an example the other talented and successful investors. Many successful investors and act that way. It will be useful to know the entire list of holders of shares of Berkshire Hathaway, as it is only first-class funds. Keep track of data that provides the U.S. Commission on Securities and Exchange, so you can keep abreast of the latest news in the field of investment. A variety of activities of insiders and hedge funds will tell you these Web sites: www.insiderscore.com, www.gurufocus.com, www.marketfolly.com.

10. Keep saving money

The crisis of 2007-2009 has taught much to the investors on the markets collapsing shoulder has a terrible back side. Therefore, in order to always stay calm, it is better to give up margin trading and keep most of the proceeds in cash at 10-40%.

11. Global investments yield good returns

In recent years increasingly popular investments in high-growth international markets, such as China and Brazil. Do not be fooled into thinking that investing in stocks of large companies like Pepsi better and more reliable. Do not be afraid to invest in those areas that are rapidly growing and evolving – it’s a good exchange-traded funds. To do this you can use as electronic broker as well as analytical online resources like ETFchannel.com.

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