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Uncertainty on the financial markets: You can protect yourself against this
Photo: Arne Dedert / dpa
The Russian troop deployment on the Ukrainian border has been causing uncertainty at all levels for weeks.
This will also have had a financial impact on some consumers.
But how bad is the crisis really for your wallet and what can you do to avoid paying extra?
My recommendation: keep calm, change the heating at the next opportunity and invest worldwide.
As you can see, I'm an optimist in this crisis and don't believe in war.
Trade with Russia
From January 21st to 24th, the Dax fell by 1000 points and the price of gas reached a new high for the year.
Then the gas price fell again a little, but in mid-February the oil price also reached its all-time high and the price of coal rose.
The price fluctuations are not necessarily covered by the economic fundamentals.
Although Russia is Germany's most important energy supplier, it is not central to the German economy beyond the energy issue.
Trade with Russia and Ukraine, for example, plays a much smaller role than one might think.
Russia was only 14th among Germany’s trading partners in 2020, trade with Russia was a quarter of the level of trade with the Netherlands.
Half of the import revolves around energy, the rest mainly around raw materials.
Trade with Ukraine is even smaller, ranking 40th among Germany's trading partners.
Until 2014, trade with Russia was more important for Germany, but after the annexation of Crimea, the West already imposed severe sanctions that almost halved trade.
In 2021, the volumes in trade with Russia will be higher again.
But that too is »only« an expression of the increased energy prices.
Due to the higher prices for gas and oil, German imports from Russia rose by more than 50 percent to 33.1 billion euros.
In December 2021, the bill had more than doubled compared to the same month last year.
Interesting - German exports to Russia also increased significantly in 2021, namely from 23 to 26.6 billion euros.
The energy
You all know the effect, more expensive energy is right on the wallet for those who need it at the moment.
In other words, drivers who pay 40 cents more for a liter of petrol or diesel and homeowners who pay twice as much for gas or whose heating oil tank is empty.
A liter of heating oil costs 95 cents this week, in autumn 2020 the liter was less than 40 cents.
There is no quick remedy in sight, but the price doesn't have to be that high.
If the tank is not completely empty, you can also take a deep breath and wait.
And if the tank is empty, maybe only fill up with 1000 liters at first, but both remain a confident (no war) bet on the immediate future.
And you should always compare prices.
There is a difference of eight to ten cents per liter, which makes a hundred even with 1000 liters.
The financial markets
The second area where the crisis is clearly having an impact for some of you is the stock market.
The world is actually reacting nervously to the crisis.
The Dow Jones and Nasdaq lost three and more than five percent in value in January, respectively, since 2008.
In fact, it only hurts those who have to sell part of their shares on these days of all days.
So only a small part of the twelve million shareholders in Germany.
In this country, far fewer people own shares than in many other countries.
So it is also true on the stock exchange that the crisis will only be felt financially by those who have to act now.
Personal energy transition
Economically not all that bad, so?
Yes, first of all.
But no, both potential damages are indicators of a vulnerability in your wallet that you should take seriously and that you can do something about.
Investments in your personal energy transition are not only good for the environment and, in the medium term, for your wallet.
Such investments also make you independent of despotic energy suppliers.
The best thing to do is to accelerate your energy transition - it's better to switch your heating and your car over a little faster if you can.
Using a heat pump for heating and operating it at least partly with your own solar power not only makes you more self-sufficient, it also actually reduces the risk of energy costs – in the short and long term.
You can generate electricity on your own roof for twelve cents per kWh.
And if you now think: But I have to heat the room in winter when the sun doesn't shine much.
That's right, the electricity yields are lower in winter, but a photovoltaic system also works when the sky is overcast.
For the installation of the new heating there is (despite the chaos with the KfW funding) up to 50 percent direct funding from another federal institution, the Federal Office for Economics and Export Control (BAFA).
If you have bought or leased an e-car, look at the electricity prices, but the much more serious fuel price development may not matter to you at first.
If you can possibly still charge the car with your own electricity, the advantage here becomes even greater.
Up to 9000 euros funding when buying a car are included.
Invest money internationally
more on the subject
ETFs and equity funds: How to invest your money with a clear conscienceBy Henning Jauernig, Alexandra Jegers and Anne Seith
Expand your investment.
In times of crisis, the stock market fluctuates quite a lot every day.
But at Finanztip we have been advising the same thing for years - regardless of whether the stock market prices are currently rising or not: Invest in market-wide, international ETF equity funds and ideally choose a time horizon of 15 years for your investment.
One of the underlying indices has fallen by seven percent in recent weeks, but has grown by an average of seven to nine percent per year over the past few decades.
In fact, in the past, the international stock market has regularly reacted quite unperturbed when it comes to threats of military escalation.
In the respective rest of the world it remained peaceful.
If you invest long-term and worldwide, you therefore have to fear far less for your investment.
At least not if you don't let yourself be infected by short-lived daily enthusiasm or price hysteria and calmly rely on longer-term developments.
Global stock indices such as the MSCI World are not a list carved in stone, but rather automatically adapt to important economic trends.
The index always contains only the most important, most expensive companies in the respective countries.
Companies that can no longer keep up are automatically sorted out.
And what about gold?
At the end, I am often asked the question of investing in physical gold.
Understandable, because physical gold will probably never become worthless and you could take it with you comparatively easily in a major crisis.
That's why gold is considered a crisis currency.
But does gold help you in the small crises?
Rather not.
For two reasons: First, trading in gold costs a lot of money, the difference between buying and selling rates is high, the smaller the denomination, the higher.
The classic stock market adage »Back and forth empties pockets« applies here.
Secondly, you would then have to get the timing right, a difficult task.
On the other hand, if you see gold as a hedge for your portfolio so that it fluctuates less, then a ten percent gold investment in your available capital is already plenty.
Get something out of this crisis: Accelerate your energy transition and invest even more globally.
This makes your wallet more crisis-proof.
