After warnings of “tsunami” .. How does the investor behave in disaster times?

Natural disasters, such as earthquakes, volcanoes, fires and hurricanes, have a major impact on the economy and financial markets, as supply chains may be disrupted, infrastructure damage, and a state of economic uncertainty.
In the wake of the violent earthquake of 8 degrees that struck the Russian coast early Wednesday, and warned in many regions in the world, the importance of questioning the effects of such disasters on the business world, and how investors can prepare for such risks and protect their investments, or at least to limit their losses.

How natural disasters affect the economy?

In 2011, an earthquake and taguname of Japan caused severe damage to the country’s manufacturing sector. This led to a lack of electronics and other commodities, which negatively affected the stock market. The Nikki index fell by more than 10% in the days after the disaster.
In the United States, Hurricane Sandy in 2012 caused widespread damage in the northeast of the country. This led to power outages and transportation disorders, which negatively affected the stock market, as the Standard & Poor’s index fell by more than 2% in the days after the disaster.
Recently, this year, Los Angeles fires are expected to cause between 135 and 150 billion, making them perhaps the most expensive in the history of the United States.

How does the investor behave?

The Invest -Tree website provides a number of preparations for the investor into consideration to avoid disaster risks that may harm trade and investment.

Continuous follow -up

Invest -Tree recommends reading financial news sites and blogs, and the follow -up of financial experts on social media to obtain regular updates on natural disasters and their impact on the economy.

Diversification of investments

Investors should diversify their investment portfolios across regions and sectors, a research whose business is not affected at once in one region that has been exposed to an emergency event or a natural disaster.

Financial readiness and documentation

Investment experts share a separate fund to recover from disasters, including cash and liquid assets that are easy to access when it is not possible to reach other assets.
Hedge strategies are also taken into consideration, through financial derivatives or other financial tools to mitigate possible losses.
The investor must also maintain detailed documents for his property, such as documents, photos and videos, to facilitate matters when insurance claims.