5 investment options to choose when the market is down

"Invest when others panic" is a principle American investor and philanthropist Warren Buffett has applied to stay afloat in the stock market.

This principle has been echoed repeatedly by asset managers and investors to encourage investment even during market downturns.

For Ghana, the last two years have been characterised by turbulence in the investment community, leading to a decline in investor confidence.

The appetite for investment fell even further due to the Domestic Debt Exchange Programme, which affected government bonds, once considered the safest investment tool.

However, Ghana's economy has, over the last six months, shown signs of rebound and recovery, as reflected in its macroeconomic indicators and general outlook.

This presents an opportunity for those who have resorted to keeping their money in cash or fixed deposits to consider investing again.

This article explores five investment options worth considering now, even though the investment climate is not entirely favourable.

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1. Bank of Ghana Gold Coin

The Chief Executive of Dalex Finance and economist Joe Jackson has described the newly introduced Bank of Ghana Gold Coin as "an excellent investment tool."

According to him, gold prices have outperformed the US dollar since the beginning of the year.

The coin was introduced by the central bank to discourage dollar hoarding. Each day, the bank publishes the coin’s price in correlation with the daily exchange rate. Buyers can purchase the coin and hold it until they decide to sell in the future when prices appreciate.

The coins are available in quarter-ounce, half-ounce, and one-ounce denominations.

2. Stocks

Investing in stocks when the market is “down” may not seem sensible to the average person, but it often works well for investors. Historically, the stock market has always rebounded to generate profits over the long term.

Stocks are typically suited for long-term investments and for individuals with a higher risk tolerance. Returns can be substantial and rewarding. However, because stocks are high-risk, it is crucial to work with trusted brokers or investment schemes, tread cautiously, and seek expert advice.

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3. Treasury Bills

Treasury bills are short-term, safe investments with maturity periods of 91, 182, or 364 days. Despite recent reductions in interest rates, they remain a solid investment choice.

Treasury bills are auctioned by the Bank of Ghana through commercial banks every Friday. With as little as GH¢100, you can start investing in them.

4. Partner capital

Partner capital refers to funds provided by an individual to support or grow another person’s business, typically in exchange for equity, profit-sharing, or convertible debt. This arrangement forms a close, trust-based financial partnership.

With the economy rebounding and inflation easing, it is advisable to identify promising businesses and invest in them for potential long-term gains.

5. Human capital investing

Human capital investment involves putting resources into an individual’s skills, career, education, or future earning potential, in exchange for returns tied to their success.

Regardless of market conditions, investing in people can be both financially rewarding and personally fulfilling.

SSD/MA

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