The cyclical nature of the economy, characteristic of many countries, is reflected in the sequence of economic development. Behind the recession there will inevitably be a rise and vice versa. In conditions of instability and uncertainty, the primary and most urgent task of a financially competent person is to preserve their savings, and perhaps their increase.
Economic instability is manifested in currency fluctuations, in the growth of inflation, etc. In the above cases, there is a risk of losing the purchasing power of money, that is, 1,000 soms today may cost 990 soms by tomorrow. Consequently, the savings stored “under the mattress”, at a certain point in time can depreciate and lose their value.
Bank deposit is the most common way to invest your money. Bank deposits are the so-called “classic” tool for saving. At the moment, the rate of return on deposits varies depending on the term in the range from 9 to 15% per annum. The main advantage of bank deposits is high liquidity, that is, you can return the funds you invested in a short period of time, but in this case you lose the interest accrued up to this time.
Investments in gold: they are considered the most reliable, due to the fact that the price of gold itself cannot fall to zero, therefore, the investor will not lose all his savings. It is also believed that gold, due to the constant growth of its value, can be an excellent refuge from inflation.
When investing in gold, it should be remembered that this is a tool for long-term investment, you can get a return on your investment only after a certain period of time (10-15 years).
The property. It is believed that real estate is always growing in price and is in high demand. At the moment, the real estate market in the world is characterized by a decrease in sales activity, which is due to excess supply over demand. In addition, real estate investments require large initial investments, both financial and temporary. But if you have enough money to buy real estate, then the period of economic instability is the time for this, since prices in this period of time are much lower than in the period of recovery.
Government securities – characterized by high reliability, but the rate of return on them in the current period did not exceed 14% per annum. If you belong to the category of conservative investors, and your goal is only to preserve your savings, then this investment tool is for you.
For those whose goal is not only to preserve, but also to increase their funds, we offer to pay attention to corporate securities, which are becoming increasingly important every year.
Corporate bonds, along with bank deposits and government securities, may well suit you as a reliable investment tool that can save your money from impairment. At the same time, bonds have several advantages.
Firstly, the lack of risk. The yield on bonds is fixed. Regardless of the results of operations, the company issuing bonds is obligated to pay interest income. No other investment object guarantees a certain income. Thus, you can get high income with the least risk.
Secondly, high profitability. At the moment, the rate of return on some bonds of domestic issuing companies reaches 18-20% per annum, which not only covers the level of current inflation in the country, but also helps to generate additional income.
Thirdly, high liquidity. Bonds can be sold in the secondary market at any time and at the same time, without losing profitability. While closing a deposit account before the end of the term, the investor loses all the accumulated income. And real estate and precious metals have the lowest liquidity, since it is not known for how long these types of investments can be realized.