As globalization has led to a decline in the growth rate of the world economy, investors prepare for the worst. Or the best, as that depends on someone’s personal philosophy and situation. The volatile, financial world is not getting any more stable on the short term. But how to protect your assets? How to gain trust in the outcome? How to keep your return on investment as high as possible while sailing in ‘murky waters’?
Bull markets. As ever needed as hated
As Warren Buffet recently stated, ‘a bull market is coming’ . As scary, unpredictable and uneasy that may sound, it is also a necessity because it freshens up the market. As Buffet is not predicting, as no one really can but only speculating and anticipating, he believes that going right when everyone turns left is the best choice: "Be fearful when others are greedy and be greedy only when others are fearful."
The stock markets condition is one of the first warning signs. When the market is booming, the economy flourishes and grows like a summer garden. However, when it lowers, one must prepare for an economic decline. As 2022 was one of the worst years for stocks in a long time, experts can be far from optimistic. A recession approaches and everyone globally prepares for the storm. “The upcoming year from a global view will be choppy,” says Rowan Rozemond, Chief Information and board member at DHF Capital S.A. “We are living through the stress and relief waves caused by covid. The (over)compensation by governments and central banks have swung markets wildly in the past years. And the water has not calmed yet. In the past six months we have witnessed a massive extraction of M2 money supply by the FED and their counterparts.” Rozemond points at the banks raising their interest rates among other things to ‘tame' inflation.
But how much investors ‘hate’ the bull market, there are also reasons to love. “This ripples through the market bringing volatility.” But in theory, with that volatility, it is a perfect time to reshape your portfolio or explore other markets. It means diversifying one's portfolio or taking advantage of hedging strategies, understanding the implications of globalization on personal finances can help mitigate future risks and ensure financial security in the long term.
Causes of the Declining World Economy
There are a number of factors that have contributed to the declining world economy. Rozemond: “In their jargon the FED has said, in order to fight inflation, we need to destroy demand. And with destroying demand such as wage demand and loan demand ‘need’ will break things. And so it happened. The UK Gilt market broke, the US dollar went parabolic, the crypto market crashed and the central bank of Japan was forced to abandon their rate curve control policy .”
The current global economic slowdown has been caused in part by declining demand for goods and services due to globalization. This has led to a decrease in global GDP and inflation. As a result, your assets may be worth less than they were previously. For example, the value of the US dollar has declined relative to other currencies, which means that you may have to pay more for imported goods and services.
What Does This Mean for Investors and their assets?
In times like this, investors need to take a close look at their portfolios. The first thing you need to do is evaluate your portfolio and make sure that you have a diversified mix of investments. This means having a mix of stocks, bonds, and cash equivalents. You also need to make sure that you have investments in different sectors and industries. You should also review your investment goals and make sure that they are still appropriate.
DHF Capital and its ‘swing trading’ as a strategy
As an asset securitization company, all we think about is to gain the highest profit and lowest risk factor for our clients. That’s why we work with a guaranteed return policy in which we secure your ROI. How can we do this? “Volatility is exactly what works in your benefit when swing trading. And swing trading is a big part of our strategy. Generating return to the upside as well as the downside. And with inflation not tamed yet, a high return strategy like that of DHF Capital S.A. is one of the few stratus’s that not only preserve your purchasing power, but also enhance your wealth”
You don’t have to become an investment expert yourself to make money grow. Learn more about investing with DHF Capital S.A. Get in touch with us, we gladly explain about our service.