Evaluating Safer Investment Strategies During Economic Uncertainty

Mar 8, 2010
Sarah Briggs

Many economists and consumers are asking, however, if the traditional sources are “safe” during economic downturns, particularly global financial struggles. Avoiding risk slowly becomes a battle to protect and preserve assets as the climate for investment gain shifts in economic downturns.

From gemstones to foreign currency, investors seek out safe havens through the most traditional sources during economic uncertainty. Due to fluctuating values and markets, however, even the safest sources of protecting capital include risk and uncertainty, especially for investors seeking profit from their capital.

Investing in CDs, Funds, and T-Bills

Typically perceived as one of the safest forms of investment, Certificates of Deposit (CDs) are still the first move for personal or beginning investors. Savings and retirement funds are often invested in CDs and Treasury Bills as the first step towards bigger investment or purchase goals.

Consumers planning to protect their savings through traditional slow-growing securities like CDs, mutual funds, and T-Bills may feel discouraged by the economic woes surrounding banks and investment. While questions surround the Treasury’s current procedures and banking interests, many financial advisors still feel this is the best resource for protecting investments.

Commodities and Currencies

Investments in commodities are traditionally perceived as a risk for seasoned investors, but many investors gravitate towards forms of crop-based investments in light of banking and currency conflicts. Rising seed investments push bio investments into a position of interests for investors seeking something beyond traditional stocks and bonds.

Portfolios and financial opportunities based in currency spreads, traditionally chosen for investment security or portfolio variety, are also devolving to an investment risk for investors seeking to shelter their capital from financial erosion.

Gold, Silver, and Precious Stone Investments

Still considered a risk despite value, gold and silver investments are a growing financial field for inexperienced and worried investors alike. Despite the fluctuating value of precious metals, many new investors and worried consumers see gold and silver as the best means of preserving or protecting assets.

Precious stones are also a growing market, but the price and value issues make them a riskier choice. Appraisals vary depending upon cut, size, and color; natural stones and metal settings are among the features that make investment choices more difficult for consumers who want to protect the value of their capital in physical investments.

As always, there is risk with any financial transaction. Investors should thoroughly weigh any opportunity before sinking capital into a project, even to protect or preserve existing finances. Once the risks are understood, however, protecting capital through investments may be worth it for investors worried about global economic depression.

Resources:

Tobias, Andrew. The Only Investment Guide You’ll Ever Need. Harvest Books, 2005.

Waldron, Richard E. Futures 101: An Introduction to Commodity Trading. Squantum Publishing, 2003.