Recession In The Global Economy: How To Save And Increase Capital With the Broker Metadoro Service

It is a difficult period for the global economy. 2022 is already being called an abnormal year from an investment point of view because markets are falling everywhere, the value of almost the entire range of assets is declining, and only a few areas remain stable and outperform the broad market.

More than 1.000 different trading instruments are available to Metadoro clients, and you can assemble a good «anti-crisis» portfolio here. Let’s look at the opportunities offered by the company and talk about the basics of creating such a portfolio. 

Investment risks in a recession

The word «recession» can be heard more and more often. It is mentioned in official statements even by the heads of the Fed and the ECB. It was impossible a year ago, and few people even talked about such a phenomenon. Now all investors have only one thought — how to invest until inflation subsides and growth begins. Markets are under constant pressure in the current environment because the monetary policy is being tightened in all leading economies, and the Central Bank’s balance sheets are being reduced.

It is difficult for companies to turn a profit, as borrowed funds are much more expensive due to rising rates. Production chains disrupted during the pandemic have been restored, but production is also experiencing problems due to reduced consumer demand. If you look at the news reports, you can see how seriously inflation has hit ordinary citizens of different countries, including developed ones.

Once demand and production are reduced, raw materials prices also fall. All these actions create difficulties for those who want to place their capital and avoid the negative impact. So what to invest in? Let’s consider the most relevant assets for the investment portfolio.

Classic anti-crisis tools

The basis for investing in times of crisis always remains the same – bonds and debt obligations of various issuers. The most popular are still American securities. Talking about public debt and other things can be considered ordinary speculation. Investment funds invest tens and hundreds of billions of dollars in treasuries since today they are considered the most reliable direction. There are two main categories of bonds:

• Corporate.
• State.

Higher returns and slightly higher risks characterize the former. You should choose the best option according to your preferences. Many different securities are available to Metadoro clients, and you can find a suitable choice regarding profitability and risks.

The second type of instrument is reliable stocks. Examples include dividend aristocrats and large corporations. The payment of dividends partly offsets the market decline and is also a powerful incentive to hold a security.

After all, the market will recover, and dividend-paying companies often become a priority for investors. As for the market giants as large companies with stable performance, they are always in demand from institutional investors. They keep the stock from falling too much with the help of their purchases.

Secondary anti-crisis tools

The current crisis is considered by many to be anomalous. It happens partly due to the unprecedented response to Covid and the fact that more than $10 trillion has been injected into markets around the world. The consequences have affected all markets in general, so now many people are considering even those areas that were never particularly interesting to them. Let’s list them:

• Currencies. Indeed, the Central Banks played an important role in strengthening the dollar when the Fed led the way. The dollar is still attractive, at least for carry-trade reasons.
• Cryptocurrencies. Digital assets are down 85% or more from their highs. Many traders believe this is already an absolute bottom, at least for significant coins. There are many such cryptocurrencies in Metadoro, and you can buy and hold positions calmly.
• Energy carriers. Geopolitics is involved here.

Raw materials and energy resources traditionally fall during a crisis. But the current economic downturn is also accompanied by severe geopolitical tensions. It impacts oil and gas, which are showing record volatility.

There is no improvement in the situation yet, so it is possible to take a closer look at such non-standard investment instruments mentioned above. There is no need to invest a significant share of your capital in them – it is enough to allocate 15-25%. They are unlikely to fall even lower, and in the future, they can give a solid profit.