Tuesday May 24, 2022

Make money by dropping the stock market

Investments in financial products traded on the stock market will of course fall even in times of downturn. We will learn on the treasure of a specific hunter, how to ensure that you survive even in a situation as it is now.

The client regularly invests it in equity funds. Thanks to the outside salary, he wants to reimburse his invested income. However, it does not want to raise equity funds, which are subject to known cyclical influences. How to proceed in such a case and how to recommend the funds to the client?

Luk works as an IT specialist. A few years ago, he began investing regularly in mutual funds to create a financial reserve. He decided to increase the value of pensions in this way for at least 10 years and distributed 3,000 K msn into 5 different funds in order to reduce the risk.

He relied on the fact that if the furnace just needed to withdraw some money from the investment, there would always be something among the funds that would earn money. At present, however, the situation is such that all the funds in which Luk invests are in dispute. Because Luke was recently raised a salary, he is considering where to regularly invest 2,000 Knn. He realizes that a period of decline is good for the purchase. At the same time, he would like to have investments of the exchange office so that even in the period of decline some of them will pay off.

On the line of commodity

The interconnectedness of the worlds of the economy results in a similar development of the stock market in the dark. So if stock markets fall, they fall worldwide. When they grow, they can be practically globln. Specific funds then differ only in the fact that some have a decline in some and some less. Therefore, the distribution of investment between different investment companies, funds and regions varies.

If we want to achieve a positive appreciation of finance even in times of declining stock markets, you need to look for other instruments than stocks. And one that does not correlate with so-called shares. This means that the performance of the action is not conditional and is not dependent on them.

It does not pay to invest in one specific commodity and invest in it. It is best to choose a commodity fund that has different types of commodities in the portfolio and their value according to the market situation. In the long run, one particular commodity has the potential to appreciate as stocks. However, the whole commodity market has this potential.

Emerging market bonds do not perform as high as stocks, but they have blushed. The long-term performance of the stock is on average around 10% pa For emerging bonds, the market can be expected to be about 7 – 8% pa The big advantage of bonds compared to stocks is their lower volatility. We should receive only a small amount of shares with a relative risk. The advantage of this investment is the investment horizon several times to achieve the expected return. Recommended for about 3 years.


From the point of view of the current market situation, when stock prices have fallen to very low values, it would be worthwhile to avoid these difficulties and strengthen the investment in the stock. Luk invests in stocks and is enriched by a portfolio of instruments that have the potential to grow in the future, even in times when there will be a decline in the stock market. Therefore, it should divide the amount of 2,000 K between the changing instruments – bonds and commodities. Due to the reduced risk of the bridge, it is possible to divide it better between the 3 funds.

We will invest 1,000 Knn in a fund exchanged for bonds of the countries of the entrance to Europe, another 500 Knn in the fund, its portfolio consists of bonds developing markets from all over the world. This is a growing economy, such as in Latin American countries. Both funds are secured in Czech crowns. We will invest the remaining 500 K in the commodity fund, its portfolio consists of various commodities, such as energy, food, agricultural crops, industries and precious metals.

Luke’s portfolio of regular investments is now being further developed. CZK 3,000 continues to invest in equity funds, which have the potential for interesting returns in the long run. Dal 2,000 K invests in the fund to replace instruments that are in three risks. Mn fluctuate even in times of declining stock market may grow.

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