Economic uncertainty seems to be increasing at the same rate as COVID-19 spreads. It exists the fear of a recession and a general flagging of the economy worldwide. However, you should not panic. In times of ambiguity, it is advisable to look for alternatives to protect your liquidity and your investments, and even try to earn the best possible profit. The stock market and real estate are generally two of the most viable options to invest, therefore, you must recognize what are the risks and the levels of profitability of each one to make the most consistent decision according to your needs.
Stock market: high profitability against high risk
Investing in the stock market is usually synonymous with profitability, you can earn a lot of money when you have the knowledge and the experience. Besides, it offers you the possibility of investing in different types of financial instruments, increasing your profit margin. However, investing in the stock market can represent a high risk. The more risk you take, the possibility of revenue is greater. Therefore, when investing you also assume the responsibility of losing part or all of the money invested. The stock market is highly profitable but also very volatile.
The Mexican Stock Exchange, for example, has entered a stage of high volatility in recent days. Due to COVID-19 and its consequences in some sectors such as tourism, there has been a drop in the stock market and the Mexican peso has been affected, both by external and internal factors.
Real estate: high long-term profitability
Contrary to investments in the stock market, investing in real estate represents a lower risk and a higher level of stability. The financial return on investment in real estate is highly profitable and safe. However, in some cases, the results of that investment will not be reflected instantly, rather they represent a safe long-term investment. In cases of economic uncertainty such as the one the world is currently experiencing; a real estate could mean a possible source of extra income or a guarantee for your business. Everything will depend on the type of real estate you invest your money and your objectives.
In real estate, the investment opportunities are diverse and each one offers different results. In consequence, you diversify your money and you will be prepared for sudden economic changes. Another important element is the capital gain, the increasing value that your property acquires over time and how it helps to increase the possibilities of your investment. Investing in real estate will not only benefit your finances but will also help to fortify the economic and social fabric since it normally involves other economic sectors.
Protecting your economy and your investments is always essential for SIMCA, that's why we give you these recommendations so that before investing, you make the decision that best suits you.
