The coronavirus and its many variants, including Delta and, most recently, Omicron, are shaking the world of finance. Will the health crisis be followed by another period of economic dislocation like the one we experienced in 2020? In these turbulent times, your eyes (and fears) are rightly trained on your assets. Find out in this article how to protect them and make them grow.
Managing your finances is no easy task. For the second year in a row, the coronavirus will leave its mark on the festive season, with the consequences we are all too familiar with in our daily lives. But there is a small consolation (yes, we are always optimistic at Birdee!) global finance should a priori be less impacted this year, the coronavirus having become a fixture instead of the exception it was in 2020.
Okay, but will it affect my personal assets? There are a few tricks that are well known to economic experts that could help you get ahead, especially if you're looking for juicy returns.
don't be short-sighted
"You see, the world is divided into two categories of investors, those who panic, and those who wait. You panic!" Well, we had to tweak Clint Eastwood's famous line from "The Good, the Bad and the Ugly", but you get the idea. If you have invested in the markets, for example via a securities account, or if you have a unit-linked life insurance policy, it is not a good idea to panic. Want to run for cover because the markets are falling? There is nothing to stop you from doing so, but investing for the long term is the best way to dilute risk.
diversify your assets
People who are able to keep their cool and diversify their savings, while respecting their investor profile, are the ones who can hope to get through financial crises without too much trouble. Diversifying your investment products is an effective approach to building wealth while minimising risk. The first step, of course, is to build a savings buffer. That's what regulated accounts are for, but rising inflation (4.9% in November in the eurozone!) makes them economic nonsense in terms of returns. Well-managed assets are assets that grow thanks to more dynamic accounts.
sri FUNDS HAVE THE WIND IN THEIR SAILS
Gone are the days when socially responsible investment (SRI) was perceived as unprofitable or fake environmentalism. According to a 2020 study published by the Ecole Polytechnique, SRI funds outperform traditional funds by 62%. And they are just as resilient, if not more so, in times of crisis.
Why? Because they allow investment in forward-looking sectors such as health, technology and biotech, which have held up particularly well during the Covid period. While more traditional sectors, such as those linked to the oil industry, raw materials or air transport (which are quite polluting, let's admit it) have been given the cold shoulder. Eco-responsible investments, such as those provided by Birdee, offer returns that are adapted to your risk profile while also giving meaning to your investments.
These turbulent times require you to pay closer attention to your savings. Here are some other great tips:
- Monitor the performance of your accounts. If you manage your portfolio yourself, pay attention to its evolution in order to make the necessary decisions. With Birdee, you needn't worry because the robo-advisor will take care of everything based on your risk profile. Nevertheless, pay attention to the regular reports sent by Birdee, which fill you in on how your portfolio is evolving. Knowledge is power!
- Opt for a multiple investment strategy. Nothing prevents you from having several securities accounts or life insurance! Diversification is the key to growing your assets. Indeed, they are the best solution for spreading risk (from 1 to 7 according to the AMF, 1 being low risk, 7 being a rollercoaster but offering the best returns). In finance, more than anywhere else, you should never put all your eggs in one basket!
- Be part grasshopper, part ant. Saving is good, but making your money grow is even better! Always keep an emergency fund available in a savings plan while investing some of your money in higher-yielding assets. We are not necessarily talking about thousands of euros, just what is needed to gauge the performance that a unit-linked life insurance or a securities account can bring you.
Would you like to try products that offer higher returns without staking huge sums? Birdee has the answer for you because it offers the chance to invest in them from just €50. What are you waiting for to start?