Investing during Crisis | Ukraine Russia War | Financial Crisis | ET Money

In this ET Money video, we shall examine war as an external crisis and examine how investors can use those unnerving periods as an opportunity to modify their portfolio for future investing success.

👉 WAR & EQUITIES

Ukraine and Russia play important roles in commodity markets. Ukraine is one of the world’s largest producers of wheat and cooking oil while Russia is the world’s largest producer of nickel, the second-largest producer of natural gas and the third-largest producer of oil.
These disruptions might and probably will have a substantial inflationary impact on our economy which is likely to give the Reserve Bank of India more headaches as it continues to stick with low interest rates in order to keep the economy buoyant.

👉 IMPROVE YOUR PORTFOLIO DURING A CRISIS PERIOD

Equity investors react to a crisis by moving their portfolio to relatively safer investments like technology, utilities, consumer staples, defensive mutual funds etc. but that’s no guarantee that these are sure winners in such times.
These moves can help deflect some blows but they don’t do that well a job to qualify as taking advantage of a situation.

A related strategy which is a bit more sophisticated is the use of options which can be applied on equities, bonds and even the commodity market to good effect.
What else can investors do if the war begins and stocks start to fall by 15, 20%?
It’s the perfect time to get out your shopping lists i.e. your list of high quality companies that you have been wanting to buy on the cheap for some time now.

👉 1. FOCUS ON NON-FINANCIAL COMPANIES

Look at non-financial companies as your first filter. The idea here is to pick companies that deal in essential and small ticket items that the average Indian needs on an everyday basis, things like milk, medicines, rice, wheat, soap etc. These are too important a product or service for people to postpone consumption and since these are essentials, the government would always do their best to ensure uninterrupted supply.

👉 2. CONTROL THE SUPPLY CHAIN

Look at companies who own or control their supply chain. When a crisis like a war hits us the supply chain is the first thing that gets damaged and any hits in production comes in much later. In that context, you want companies in your portfolio that have fewer layers in their operations. For instance, it’s generally seen that companies that use direct distributors find their feet a lot faster than ones that use wholesalers. Firms that have their own B2C channels like showrooms, diagnostic labs etc. have a lot more control and are likely to rebound faster than others who rely on third parties.

👉 3. SUPPORT TO STAKEHOLDERS

A third characteristic or more of a signal that comes out during crisis times is the grace with which a company manages the interest of its stakeholders like suppliers, vendors and distributors. For example when Covid struck, some companies extended an extra 60 days of credit to their distributors or even gave working capital loans to the showrooms to manage their situation better.

👉 4. POSITIONED FOR ORGANIZED SECTOR SHIFT

A crisis period almost always sees a market share shift from unorganized to organized players. This aligns with the survival of the fittest and strongest principle as the strong grow stronger and the smaller, weaker players tend to lose steam and die. In that context, look out for companies that are in industries with growing demand that have more scope for premiumization have capacities to plug the supply gap .. and are serious brand players who are ready to up their advertising budgets when everyone else is cowering for cover.
Some industries you can explore here include packaged foods, footwear, textiles, logistics, electronic equipment etc.

👉 Chapters

00:00 Introduction
01:32 War & Equities
04:18 Improve your portfolio during a crisis period
07:42 Focus on Non-Financial Companies
08:31 Control the Supply Chain
09:12 Support the Stakeholders
09:50 Positioned for Organized Sector Shift

👉 Important links mentioned in the video:

► Tax Harvesting video

► Tax Harvesting blog

► Economic Moats

► 4 Important Evaluation Metrics

#ETMoney #UkraineRussia

► Subscribe to ET Money Hindi

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[sachin_]

No worries for me since am investing with Genius. Thank you 😊

[krsathyabama]

*👍GOOD CHANCE/BEST OPPORTUNITY TO INVEST FOR LONG TIME INVESTMENT😇🤗*

[satyam-evajayate]

We've invested in Nifty50 Index funds when markets crashed during March/April 2020 and enjoying 35% returns. Always investing on markets crash days in different equity, others days in elss and gold saving mutual funds.

[EngineeringLabs]

The couple of charts at the beginning of the video are itself sufficient enough to justify video thumbnail. Numbers speak.. no clickbaits from ET Money. As always, super like to ur content

[kamathsonline]

Please create another update on Genius. The feedback, the user behavior, the learning for Genius and related changes, and future plans.
This will give more confidence in small but long term investors

[premprakash]

how to place the lowerest nav value in mutual fund ET money , bez every day night 11 PM only NAv is updating . if i place the order in the next day i am not getting the same NAv value if i place the order .. sir, plz give us the advices, how to get NAV based on displayed value .. wther this is possible ... .this will help the subscriber . to place the bulk/ 3 SIP value combined amount if market are down .

[rishacha]

I am investing using Genius, but there's no allocation to S&P 500 or NASDAQ. When are we diversifying to these funds?

[sushantneo]

Sir, If possible kindly make Hindi videos as well.

[nitinj]

Hello Mr Shankar, when do you plan to make Genius available for NRI investors?

[YunusJamal]

#ETMoney: As I can see rebalancing is monthly activity. What if something unseen happens like a Nuclear war, covid like situation etc..do you notify customers on an immediate basis to rebalance the portfolio suggested by you on Genius portfolio?