Blood on the streets: is it the right time to invest?
May 13 2020 - 12:00PM
JCN Newswire (English)
SYDNEY, May 14, 2020 - (ACN Newswire) - In just about three
months, the coronavirus managed to spread across the globe
triggering an economic crisis in its wake. As a result, the entire
globe has experienced a short-term collapse in productivity hence a
global financial crisis that experts predict could be worse than
that of 2008.
Even though central banks and financial authorities are trying to
soften the blow with policies aimed at increasing liquidity in the
global economy, it is evident that a global economic downturn is
unavoidable. The big question, however, is: How are you as an
investor preparing for the looming global economic crisis?
What should investors do?
In the words of Warren Buffet (the oracle of Omaha), the best move
is an "attempt to be fearful when others are greedy and to be
greedy only when others are fearful." Fear has gripped the markets
and for any seasoned investor, the obvious move is to buy low
hanging stocks, shares, and bonds in collapsed markets.
However, while markets can be hard to predict even at the best of
times, the coronavirus pandemic makes it even harder to understand.
Reports show that investors who are getting back into the market
are receiving confusing signals as quarterly earnings continue to
shrink and corporate reports provide fewer clues about the
future.
The truth however is that while some industries are bound to
suffer, some will thrive on this pandemic. Therefore, the best move
for smart investors is to jump on a platform that gives them a leg
up in the market in terms of access to a set of hybrid trading
strategies in multiple markets and in a variety of industries.
The tomato analogy
At this time, most investors will be tempted to sit on cash and
wait. Even though signs of a market rebound are evident, most
investors consider it too early to buy and too late to sell.
However, sitting on cash right now will probably do more lasting
damage and here is why.
"Government is the only institution that can take a valuable
commodity like paper and make it worthless by applying ink." This
famous quote by the renowned Australian Economist Ludwig Von
Misses, on inflation, is the main reason why you should not sit on
cash.
Governments erode the value of each monetary unit whenever they
expand a nation's money supply. As governments across the world
resort to extraordinary economic stimulus measures in response to
the pandemic, the price of assets is bound to go up.
Here is how it works.
Consider the tomato analogy where you are in a market and have only
two tomatoes to exchange with your partner's two seashells. In
total there are only four items in that market. This means you can
swap one tomato for one seashell to the satisfaction of both
parties.
However, if two more seashells are discovered in the market while
the number of tomatoes remains constant, the price of tomatoes
automatically goes up. Now you will have to exchange two seashells
for one tomato. This is assuming you only have access to that one
market.
What if you had access to avenues of mitigating inflation? You
could probably find the most profitable price for your tomatoes or
seashells. Well, trusted investment platforms like STAX help you do
just that.
With STAX you won't have to settle for the investment options in an
inflated market. STAX gives you democratized access to an
alternative asset class while enabling you to identify profitable
investments even while there is blood on the streets.
What is STAX?
STAX is the first of its kind for raising equity capital in
Australia. Its ethos is predicated on bridging the cryptocurrency
markets and the traditional securities market. With an investor
first approach, the rigorous screening process gives STAX investors
access to attractive capital raising opportunities through the
utilisation of FIAT or Digital Currencies.
STAX connects companies to people and paves a way for investors to
make an impact by investing in the early stages of businesses. At
its core, STAX was designed to be an attractive solution for
investors. This rings true especially during uncertain times as is
the current case with the coronavirus pandemic.
With an investor first approach, STAX allows investors to either
use fiat or digital currencies to take part in equity capital
raises. This means that FIAT and Digital Currency holders get to
invest in companies to create more value in the market thus
increasing overall productivity in the economy in the long run.
With this model, STAX democratises access to investors thus
lowering the high barrier of entry that locks out startups and
small and medium sized enterprises.
The bottom line
Without an inflation-resistant monetary system, an increase in the
supply of money in such a system would lead to diminished wealth
for investors who choose to hold currency rather than invest
appropriately. As the world continues to fight COVID-19, the jury
is still out on whether the market will eventually return to normal
after the pandemic.
However, for the modern investor, the current pandemic is an
opportunity to identify investment opportunities that can stand the
test of time. The best move is to rigorously select investment with
recurring revenues and scalable business models even amid an
economic crisis.
By bridging securities with digital currencies, STAX offers an
attractive proposition to experienced investors as well as new
entrants to the investment arena. With the secondary market
platform in the works, stay tuned for updates at:
www.stax.exchange.
You can check out their offerings here
https://www.stax.exchange/about/.
Source: STAX
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