Investing during the coronavirus pandemic
Investing during the coronavirus pandemic
Iban Wallet is a FinTech company that provides alternative investment options through a digital platform which is simple to use, with projected interest rates up to 6% and solid risk mitigation measures in place.
Is it a good time to invest?
This is one of those questions that is constantly being asked, especially since human beings tend to have not-so-great capabilities for actually thinking in the long-term. And there is no shortage of people trying to time the market: to pinpoint the optimal time to buy and to sell. What time seems to be showing, is that time in the market is more important than timing the market. Or as the old saying goes: the best time to start to invest was ten years ago; the second-best is now.
Why not just saving?
We are big fans of saving. In fact, without saving, there could be no investment - you can only invest what you have. But savings can only get you so far.
This is particularly relevant for the period we have been facing these last few years (and don’t really know when it will stop). Which is: with interest rates so low, savings accounts are struggling more and more to keep up with inflation - and this when they are able to at all. Which is to say, if inflation - the general increase of the price level of goods - grows at a faster rate than your savings, you are essentially losing buying power, as you can buy fewer things with your money.
Here are some options you can consider to start investing:
In this situation, how can I even get money to invest?
This is truly a personal question that will vary according to everyone’s personal predicaments. Be it your living arrangements, your employment prospects or your family situation, you and you alone are the person that can best figure this out. But we can give you some pointers.
Whether you had a budget before or not, it’s time to get one. And the first thing to do is to identify all past expenses that make no sense in a quarantine setting. Depending on your commute, money for transportation can easily be reallocated. Same goes for shopping and entertainment. Keep in mind that cutting expenses does not mean living in a state of constant struggle.
If there is one thing we can take from this experience, it is to look at things differently and really get a sense of our priorities. Once things start to slowly move back to normal, whatever that may be, perhaps try to remember how you didn’t quite miss some things. Also, don’t forget to think about the earning side either.
Even if I can set a budget to invest, isn’t it risky?
That will depend on your own investor profile concerning risk aversion. Let’s start with a point that we have already made above: no-risk products that are a part of a guaranteed scheme actually incorporate risk, the risk of your money losing buying power.
That being said, there are really no ways of investing completely devoid of risk, and the general rule of thumb is that the higher the risk, the higher the returns. And not all asset classes are made alike. For instance, financial news tends to focus on the performance of stock markets, which are prone to quick variations and higher levels of volatility, as they represent equity in a company, tied to its value.
On the other hand, debt-based products can provide more balance to your portfolio. There are a number of these, and the last few years have brought the FinTech sector to the spotlight with some innovative instruments. The golden rule here is to diversify.
Ok, but can anyone do it?
In theory, anyone can invest. Of course, there are some requirements which are highly advised, namely getting your debt under control and having an emergency fund for unexpected events. Remember: something unexpected will happen, you just don’t know when. Beyond that, there are solutions that can fit just about anybody.
However, make sure that you take on a risk level you are comfortable with, and that the costs don’t consume your potential earnings. Moreover, some solutions require quite a bit of your time to manage and analyse, so automation could be more up your alley.
As a final thought, the goal here is to make money. If you can cut the cost of investing in both time and money, you are off to a very good start.
Iban Wallet's most flexible account offers a fair projected rate of 2.5% and you can start with just 1€/USD. In addition, it gives you the option to request a withdrawal anytime. And if you like the platform enough, you can even consider getting an extra income: by referring friends, you are able to earn up to 250 euros. See how here.
To salute 75 years of liberation, Iban Wallet has a 20 euros gift for you. All you need to do is deposit 2000 euros or more and use promo code BEVRIJ20 to unlock your bonus, and enjoy getting a projected rate from 2.5% to 6%. T&C apply.