Covid transforms investment

Know 4 ways to invest in the next 10 years you must have .

The global economic disruption resulting from the COVID-19 epidemic has raised a compelling question for today’s investors: ” Which investment strategy or tool? To be able to return to long-term sustainability , ” we can use the knowledge that has come up in previous crises, this time it creates opportunities on the new perspectives that might yield equivalent or better.

Actually this question, I can say right now that With the time of the crisis that we face at this time.  its till too short to decide. That How will the economy and society change in the future? And because of this situation where the world population meets together. It is a situation that human history has never happened before. Therefore, it becomes even more difficult for us to be able to answer the question with 100% confidence, ” What investment strategy or tool? That will be able to provide sustainable returns in the long term “

But even so, with the technology disruption that has emerged before.The spread of COVID-19 in the past.  It is enough to allow us to see some marks. Which I would like to say This is a personal observation from my own observation and analysis that. The theme of investing in the long term after this What are some interesting and different things?

1. Diversified Portfolio or diversification in all asset classes. Allowing you to go through the crisis in a less painful way as in the past

If back in 2018, the President of the United States. The trade-war game kicked off that year, with only ” holding cash” investment assets that were controversial among professional strategists. Is it the end of portfolio investing to diversify? Because no matter what assets you invest in in 2018, it’s a total loss Not leaving even government bonds, which are known as the lowest and safest

But as time passes We have already begun to see that. The events of 2018 were short-lived, because as the year of 2019 the returns of each asset returned to normal, causing the allegations. Stop spreading the risk, it is slowly disappearing until the most important piece of evidence that has emerged since March. 

Last April, the global stock market correction averages minus more than 30% from the peak. Because I don’t know How did the world cope with COVID-19 in the first place? But if our portfolios With a mix of government debt securities and gold, you’ll find that your investment portfolio reduces volatility and is very helpful in preventing severe equity correction injuries in the stock market. And this is what I believe we should continue to do.

2. ESG or Environmental, Social, and Governance will be weighted by investors.

The COVID-19 epidemic has elevated the importance of the way companies operate. Both in terms of environment, employees and governance In the direction of increasing ESG standards.

Organizational management in the issue of employee well-being For example, having a Work From Home policy that facilitates modern work styles. And it is social distancing in order to avoid putting employees at risk of COVID-19 infection, as well as past extravagant expenditures. 

If this continues, it may affect your reputation and future relationships with customers. Or, it makes it harder to find competent employees into the organization. These are the things that investors will give more weight. And investors are likely to pressure changes in business behavior that are not ESG compliant by putting less weight on their investments or choosing not to invest at all.

For ESG in terms of a wider picture. Sustainable development in the area of ​​infrastructure is the heart of the public sector rehabilitation plan. With plans to invest in large-scale renewable energy Clean transport Does not cause pollution Sustainable food And changing the global supply chain This will continue And investors can get up with short-term failures. If the company or business still tries to And focus on both Environmental, Social and Governance.

A perdestrian wearing a protective mask walks past an LVMH Moet Hennessy Louis Vuitton SE store in Singapore, on Monday, Feb. 10, 2020. Singapore last week raised its disease response level to the same grade used during the SARS epidemic, as it braced for what Prime Minister Lee Hsien Loong said was a major test for our nation. Photographer: SeongJoon Cho/Bloomberg via Getty Images

3. Lower Rate Buy High Risk = More Equity

In the post-COVID-19 era that many people call it. We will live in an era of New Normal where the new normal that we are going to see clearly is that we will enter an era of deposit rates. And debt instruments approaching zero or even negative levels in many countries, mainly due to stimulus measures from monetary and fiscal policy. It should take quite a while for the world economy to return to normal or the same point in 2019, which means Even investors who can accept low risk Cannot save money in bank deposits Or government debt instruments can be longer due to pressure from inflation. And the return is hardly anything left. Will make money from this section Flow out for returns in financial markets and other assets

Which assets with high liquidity And have the opportunity to generate high returns (In the eyes of general investors) is the equity market or stocks, and we have seen some evidence in the past 2 months. The world economy is entering a recession. But global stock markets have been able to rebound strongly, without care or disregarding the worst economic figures since 1930, the global unemployment rate soared to record highs, combined public debt governments. More than 10% of GDP in less than 2 months is due to the overwhelming liquidity of the world. Capital therefore has no alternative to having to flow into equity instruments. To find compensation to compensate for the low interest rates on the ground

4. De-Globalization

In my view, I believe the emergence of COVID-19 is the end of the global wave. (Globalization) has been completed. The Global Supply Chain of the world has gathered in China as the final production base. 

When there was a crisis like this time Another risk that no one thinks will happen is There was a disruption in the production side. Make after this Entrepreneurs around the world will start redesigning their supply chains to be regional. Inevitably, the idea of ​​the liberal world, led by the United States. It aims to attack the transparency in the business of Chinese companies. 

The claim that China is responsible for the spread of the COVID-19 virus that has become a dead body. Conflict Chinese companies To make trading with foreign countries more difficult or even consider removing securities from the US stock market If not meeting the standard The moves of the two powers under the COVID-19 crisis appear to be the strongest since the opening of China. Of course, global trade will shrink even further, and globalization flows. May be reduced to only Regionalization is possible.