The importance of investment to address the current economic recession

The importance of investment to address the current economic recession
Preparation of the advisor d. Shehab Ahmed Al-Azazi – on August 2, 2020
Economist, financial advisor and media organization consultant around the world

Part one: the importance of investment and its strategies

As a result of what we are experiencing in this period of global financial crisis due to the Corona crisis, I wanted to put in your hands proposed solutions through investment to address the repercussions of the economic recession resulting from the current Corona crisis and initially I will try to briefly refer to the investment and its strategies in how to measure the performance of listed companies and know the investment risks and strategies that It can reduce these risks, how to make investment decisions, avoid mistakes, and take advantage of opportunities and benefits offered by the investment process as a whole.
Why should we invest now even though we are in a financial crisis and economic recession?
The answer is that good investment will, over time, help raise the money an investor needs. For example, through investment, the following can be achieved:
1. Wealth development.
2. Provide income.
3. Achieve short and medium term goals, such as buying any new asset such as a car or so.
4. Achieve long-term goals such as purchasing a new home or retirement insurance.

Some of the tools currently available for investment:
First: stocks
It is investments that give its owner a share or ownership in a particular company, and the individual becomes one of the shareholders in a company by owning shares in it, which qualifies him to be a participant in its financial success or failure, and the investor usually chooses to invest in the shares of a company from companies because he expects a future improvement In its price, or because it hopes to distribute part of its profits to its shareholders, the shares that are expected to increase in value over time are called “growth shares”, while shares that distribute regular profits to their shareholders are called “return shares”.
But what I advise the investor in light of the current global financial crisis is to own shares in new companies that are established and that the investor is a partner with a stake in it and we have many new companies available to contribute to it and not buy shares to trade in the stock market because its risks are currently high and increase the crisis in shares in both The main market and the parallel market growth, as it is considered an alternative platform for companies wishing to be listed, although investing in the main market is available for all types of investors, but in the growth of investment is intended for qualified investors only.

Second: investment funds
It is an investment portfolio managed by the fund manager, which aims to provide an opportunity for investors in it to collectively participate in the fund’s profits against a set fee.
One of the advantages of investment funds is that they are managed by specialists in wealth management.
It has privileges such as reducing taxes and has a risk distribution and participation in project development. Several new portfolios and investment funds are available in several sectors and several countries are in demand for those who have the desire to do so.

Third: Sukuk
They are financing tools that companies and governments use to provide the necessary liquidity to finance their projects at a relatively low cost, and these instruments provide protection to the portfolios of investors by providing investment instruments with lower risks and a safe periodic return.
Sukuk can be made for several types of projects, and we have the best countries for issuing sukuk, which are Malaysia. There are several types of sukuk, whatever the type of project or the size of its capital, even in billions of dollars.

Fourth: ETFs
They are investment funds that consist of a basket of shares of listed companies, traded on the stock market during trading periods, such as trading in companies ’shares and mainly characterized by their transparency as these funds always follow the movement of indicators and their investments are identical to the components of these indicators, thus it is easy for owners of units of these funds to know the performance These funds by performing indicators that you follow or simulate.
Fifth: The real estate investment funds traded
Real estate investment funds available to the public, whose units are traded in the real estate sector and aim to facilitate investment in the real estate sector developed and ready for use that generates periodic income and are investment opportunities in developing real estate projects.

The second part is how investment addresses recession
To start with, it is necessary to distinguish between the concepts of recession and economic depression, as there is a difference between them to determine the form of recovery:
Recession is a significant decline in economic activity that lasts for several months.
Depression is more severe than recession, it is an economic catastrophe whose effects may extend for several years, as real GDP decreases by more than 10%. Hence, showing the strength of the recession by turning it into a recession will result in a possible recovery.
Looking at the “economic recovery forms” that will be determined based on two factors:

The first: It is the situation that matters will end up after the crisis caused by “Corona Virus”, by either gradually limiting its spread, or finding the appropriate vaccine for it.
The second: is the degree of interaction of major and influential countries, headed by the G20, in finding plans and alternatives that are in line with the scale of the challenge.

The first possibility: a quick recovery from the recession, while still a large part of the expectations have not been achieved recovery on the ground and are still suffering from the economic recession because of the difficulty of predicting it at the present time, at least until the losses that the virus will cause, and follow the governmental measures taken in several countries to contain Its effects, and at the same time address the recession that started to emerge strongly gradually
This requires collective cooperation between people at the level of the private sector through several blocs such as grouping investors under the umbrella of cooperation such as the International Center for Investment and Business Development in Austria and at the government and countries level requires an alliance of several global powers including a link