Investing in Uncertain Times: Managing Risks and Short-Term Strategies

In these uncertain times in the financial markets, one wonders whether it is better for investors to opt for formulas with short-term returns. However, before this question can be answered, we must first look at the outlook for the near future. According to Kenneth Vansina, an expert at Mijnvergelijker.be, the financial markets will likely remain disrupted for the coming months by the blockade of the Strait of Hormuz, even if Trump manages to guide ships through this route.

Oil and gas are essential fuels and raw materials, and recent price increases have led to higher prices for many other products. This is because manufacturers are passing on these price increases. Sectors such as chemical and plastics production, where oil and gas are important raw materials, are therefore also affected by the conflict.

Respond as an investor

In these turbulent times, people wonder: should you continue investing, start investing, or is it better to take a break? According to Vansina, periods when financial markets are struggling are actually good times to start investing or to expand your portfolio. “Investing is not a short-term strategy, but a long-term approach. History has taught us that markets always eventually recover and emerge stronger from a crisis.”

It is important to be patient and to diversify well. Ensure that you invest in various sectors and products to spread the risk. Stocks with a high dividend can also be interesting. The stock market is less suitable for short-term profits at the moment, and you would be better off looking at more 'stable' alternatives.

Short-term investment options

For the short term, many Belgians traditionally opt for savings accounts. Your savings are protected there up to €100.000 per person and per bank thanks to the European Deposit Guarantee Scheme.

If you want to leave your money for less than a year, choose a savings account with a high base interest rate. Currently, MeDirect Essential Sparen offers the highest base interest rate of 1,30%. If you leave your money for at least a year, the loyalty bonus is also important. Santander Consumer Bank Vision Max currently offers the best deal, with a loyalty bonus of 1,30% and a base interest rate of 0,70%. Other banks and accounts offer even higher loyalty bonuses, but with a lower base interest rate.

Other investment opportunities

In addition to savings accounts, you can also put your money into a term account for the short term. With this, your money is locked up for a certain period, but you do receive a predetermined return. However, according to Vansina, the interest rates are often comparable to those of traditional savings accounts, especially in the short term.

Short-term government bonds can also be a good option. They are less sensitive to interest rate changes and offer relatively low risk. Short-term government bonds issued by established countries such as Germany and the Netherlands are particularly recommended.

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