The world's leading economists disagree on what the next year will look like for the global economy.. Analysts at one of the largest financial conglomerates, Morgan Stanley, believe that another round of crisis awaits us due to growing geopolitical risks.. Deutsche Bank experts believe that the financial system has already developed resistance to shocks, which means we can hope for a soft landing. And Goldman Sachs views the situation with moderate optimism: in their opinion, economic growth in 2024 will exceed forecasts, although it will not be stunning.
Be that as it may, it’s worth thinking now about how to protect your personal finances from possible economic storms next year. Here are the recommendations given by experts from the international brokerage company Gerchik & Co:
1. Diversify risks
Most likely, 2024 will be as unstable as this year, and perhaps new surprises await us in the form of rapidly rising inflation. Therefore, the main principle should be diversification — competent redistribution of risks. For example, you should not invest all your savings in a bank deposit: it is better to consider different investment options (currency, stock market, real estate). And if you decide to invest in currencies, then at least distribute your capital between several of them: dollars, euros, Swiss franc, Japanese yen — there are many options.
Victor Makeev, portfolio manager at NYSE, NASDAQ, Forex :
“To successfully invest in a volatile market, it is important to consider several factors:
Firstly, do not chase excessive returns.
Secondly, diversify funds between high-risk, but at the same time highly profitable assets (for example, stocks) and less risky, protective assets (for example, gold). Your portfolio should be balanced.
And thirdly, the portfolio needs to be reviewed from time to time: some instruments should be removed because they have worked out their potential, and some, on the contrary, should be added as more promising. Money management can and should be learned, and when large companies like Gerchik & Co provide the opportunity to do it for free, it’s worth taking advantage of.”
2. Don't panic, get knowledge
As practice shows, most people during periods of economic instability lose money because they panic and act irrationally. Look at large investors, businessmen, traders: in every crisis they not only do not lose, but also earn. Because they know how markets work, what drives prices and where capital flows. And if previously such knowledge was available to few people, now financial literacy can be mastered easily and even without investment. When you understand why the dollar is rising and the euro is falling, you will not frantically change one currency for another, but will wait for the right moment to make a purchase and sale with maximum profit.
Sergey Zabotkin, stock and cryptocurrency market trader, trading software developer:
“The financial market is becoming more and more unstable, and we must be able to adapt to everything: pandemics and military conflicts. You need to have an action plan for various cases, including force majeure. In trading, such a plan is called a “trading algorithm”; it describes what and how to do in different situations: when to buy this or that asset, when to sell, how to minimize losses and increase profits.
The algorithm must be individual, tailored to your needs, goals, and capital amount. Gerchik & Co has a service that will help you create an algorithm yourself in less than an hour.”
3. Pay attention to promotions
The global securities market will grow by almost 10% next year – this is the opinion of HSBC Holdings Pls analysts. They noticed that previously, after the cycle of rate hikes by the US Federal Reserve, the stock market grew for about 6 months. The Federal Reserve has already raised interest rates several times this year and has no plans to do so again.. This means we can expect the stock market to be bullish: the FTSE All-World Index is forecast to end 2024 with growth of more than 9%.
It turns out that if you find promising stocks, next year you can get a profit from them that significantly exceeds the return on bank deposits (according to statistics for 2023, the average annual interest rate on foreign currency deposits was 3%). If you are a novice investor with no experience, then Gerchik & Co experts recommend making money not on the shares themselves, but on the CFD derivative instrument — contracts for difference.. The cost of such contracts is much lower than the price of shares of top companies, which makes investing accessible to any wallet.
4. Try new things
Money loves silence, but not inaction. As you know, financial flows do not flow under a lying stone, so try yourself in new areas of activity, look for new ways to earn money. After all, during a crisis, opportunities do not decrease: it’s just that not everyone is ready to see them.
For example, on January 10, 2024, an online tournament for traders on demo accounts will start at Gerchik & Co. This is an opportunity to try your hand at trading without starting investments, practice trading currencies, CFDs on stocks, commodities and cryptocurrency assets — and win one of 40 cash prizes. Main prize – $5000 for first place. Registration for the tournament is free and open now.
Immediately after registration, you will have access to a private chatbot with training, strategies, algorithm creation service and risk management tips from a Wall Street trader. This will help you prepare for the tournament and improve your financial literacy for free.
Registration for the tournament is here