Rethinking investment strategies in post Covid era

Tuesday, March 23rd, 2021 00:00 |
Covid vaccine.

James Mutuku  

Financial investing is a key approach to managing one’s finances and achieving financial objectives and goals.

It helps alleviate financial distress that may arise at any given point due to unforeseeable situations.

However, due to the economic downturn brought about by the Covid-19 pandemic, investing has proved difficult.

Businesses and individuals have had to financially adjust to the new environment.

As part of your financial preparedness, you may be thinking about what you should and shouldn’t do, and how a pandemic could impact your investments. 

Investing in property is one of the most lucrative ways to make the most out of your savings regardless of whether there’s a pandemic or not.

Therefore, more and more people are seeking out advice on getting into property investment.

A good option would be banks; there are banks such as Equity that offer investment opportunities for their clients.

At the core of Equity is the Equity Investment Cooperative Society , which offers an opportunity for its members to purchase land and property at discounted rates with 90 per cent financing from the bank.

Such an example is the Thika Greens Golf Estate located at the suburbs of Thika town.

If you decided to settle on property investment; make sure you evaluate your investment strategy before spending your money, not all properties will give the same return.

A perfect combination of valuable investment is finding a property that matches your investment strategy while fulfilling your needs or those of your target tenants.

Covid-19 has accelerated an emerging set of risks that are encouraging investors and potential investors to reconsider their overall investment strategies, and to enhance their diligence and risk assessment processes to evaluate individual opportunities.

Before deciding on whether to invest with a company or not during this pandemic, it’s important to assess and consider the stability and strength of the organisation’s revenue streams.

The investment company’s leadership and the extent to which their reputation and relationships with key stakeholders have been affected during the crisis, is also a key factor for consideration.

As an investor, have a contingency plan to manage your risks, it is the only safety net for your potential problems that could come as a result of the pandemic.

Focus on boosting your cash reserves, while exercising strict cost-cutting measures and minimising non-essential expenditures. 

Work out the expected return on investment to determine whether it makes financial sense.

You can assess capital growth potential to understand whether the value of what you are investing in be it land, shares or property is likely to grow over time.

Study similar investment opportunities and weigh each option to get the estimated return and calculate the annual yield of your investment. 

Assess the investment company’s exposure to regulatory risks brought about by the crisis.

Your decision should also be guided by the company’s continued commitment to and compliance with its environment, social and governance policies or broader code of ethics during the crisis, including with vulnerable third parties in its supply and distribution networks.

Lastly, review your financial goals to make sure your investments align with them.

If you are a long-term investor, holding on to your investments, even during downturns, has generally been an effective strategy. —The writer is the chairman, Equity Investment Cooperative Society 

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