During this period of macroeconomic instability, certainly, anyone who has at least a small amount of money saved for a “rainy day” asks the question “how can I keep my money safe?”
In today’s economic environment, almost every decision related to the investment of money carries a certain risk. There is no completely safe investment. However, there are less risky investment alternatives. For example, experts from banks.eu believe that the crisis in Greece- as well as any economic shock- make it possible to keep your assets safe.
Inflation will eat away at the money you keep under the pillow. Do not think that the “nest egg” under the pillow is the best way to save money: the yield for 1 month with this method is -0.4%, and for 6 months it is -11.19%.
For those who are not chasing high returns – where the main purpose is to save their assets – the safest way to break-even is a fixed bank deposit. Interest on term deposits and savings deposits rarely exceed 2% per annum. The main goal of such investments is to save existing capital because the interest keeps up with inflation. As a rule, the fixed deposit cannot be removed without loss of your interest, so it is likely to be a reliable way to “lock up” the money for some time.
When choosing a bank, particularly in Europe, make sure that the bank is stable. Almost all the banks in Europe are now members of the deposit insurance scheme, which guarantees up to 100 000 Euro in assets. But as policies are constantly changing, it would be wise to verify this. Divide your savings as needed and place them in various banks in order to provide complete coverage.
What is the Most Stable Currency for Savings?
The first and most common opinion of experts is to diversify savings. Do not keep all your eggs in one basket! The easiest way to save money is to buy different kinds of the most stable currencies. Experts recommend dividing your savings in half: One-half to be kept in your local currency and another half in a strong currency in savings deposits.
The best currency is the currency of a strong country with a stable economy. Currency reliability determines the proportion of gold in the country’s total foreign exchange reserves and GDP.
Major world currencies, enjoying the respect of investors are:
United States Dollar (USD)
British Pound Sterling (GBP)
Japanese Yes (JPY)
Swiss Franc (CHF)
The Australian dollar (AUD)
Keep Your Money in Precious Metals
Gold and other precious metals are considered to be a “safe haven” for investors and depositors. By investing your money in such a way, you can be guaranteed to get some profit. However, according to 2013 statistics, gold prices slipped considerably, losing more than 20%. The experts in turn predict a rise in prices for the metal.
Experts advise that if you invest in gold, do not plan to withdraw your money within a year, the range of such investments should be at least 3 years. To keep your savings in gold bullion is one of the most assured. History has shown, investments in gold can bring investors up to 20% in annual profits.
Precious metals can be bought by private investors in three ways: through investment funds, unallocated metal accounts or directly in coins or bullion. Keep in mind that insurance does not cover deposits in gold.
As for the purchase of physical gold, it is important to remember that buying bullion is subject to VAT, and collector coins should be stored very carefully because any scratch lowers their cost.
The most optimal option of buying gold is to purchase through a fund, for example, one of the largest -SPDR Gold Trust.
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Perhaps one of the most common investments is real estate. However, in order to do this, you need a round sum. Today hundreds of real estate agencies offer their assistance in the selection and acquisition of property in different countries. Prices per square meter of housing vary: among the European countries. Switzerland is the most expensive where the approximate price for a square meter is 9338.50 euros. The cheapest properties in Europe are in Bulgaria and Macedonia, which cost 711.92 euros and 905.87 euros per square meter respectively. In Romania the cost of one “square meter” is 992.44 euros, in Serbia and Slovakia you can buy a property for roughly 1,300 euros.
Some countries on the basis of their own property give the investor a residence permit.
Investments in Securities
It has been shown that investment in securities is a good way to invest money in difficult financial times. This option may become even more profitable in times of crisis. How to identify promising stocks? In times of economic turmoil it is much easier to do than in “peacetime”: buy securities in oil companies or large banks. The aggregate value of these organizations is less than the value of their assets; their securities are undervalued. With such investments, you will hit the jackpot anyway. However, in this case, there are drawbacks – even if you are absolutely sure that the stock price will rise, you can hardly guess exactly when this will happen. Investment in securities is for the patient.
Investment in shares of European companies, in particular German corporations, is a good idea. But investing makes sense only after the German DAX index drops to 10 000 points. Closely examine good exporters in the car industry such as Mercedes, BMW, Volkswagen or Siemens in the heavy machinery industry as well as Pharmaceutical and chemical manufacturers.
Speaking of Greece, one of the promising companies is the Greek subsidiary of Coca-Cola – Coca-Cola HBC AG – that produces beverages for the whole Balkan Peninsula. The company is located in Greece, and its price will fall in the event that the crisis escalates. What makes this company so promising is that it is a part of a global corporation that’s dependent on consumption, which will never seriously drop in any event.
Asset Management for Those Who Know Little About Financial Markets
If the intricacies of financial markets are not your thing, entrust your savings to a trust management company. Choose a reliable management company that will dispose of them in a mutual fund. There are three types of mutual funds: conservative, which invest mainly in debt securities, funds that focus on high return and invest in stocks, and others are mixed funds.
In fact, a lot of small savers pool their savings in a large fund. All of these small savers pooled together in a trust management company is somewhat like a large collective investor. The money of these funds is protected and stored in a special depository, which keeps track of their movements.
Revenue in mutual funds is not guaranteed. If the market is growing, you will receive income from the difference between the purchase and sale of your piece. If the market drops, you will lose your money while selling your share.
Contributing to the Quality of Your Life
Many people believe that children, health, leisure and consumption is the right way to invest and save their money. As such in times of crisis the investments in various financial instruments should be changed to investing in the quality of their lives.
Another option is to contribute to the education of your children or your own health. This will allow you to feel safer in the future. Buying a new TV and computer can be much more useful and peaceful for a person with little savings than any other financial instrument.
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