The present pandemic has left many people sick and millions without jobs worldwide. Furthermore, political instability and social unrest have plagued parts of the world in the weeks and months following the outbreak of Covid-19.

To be sure, the world is experiencing a humanitarian catastrophe that invites no opportunity for financial opportunism. However, it is incumbent on all of us to do what we can to protect our financial futures and safeguard our wealth in such uncertain times.

As the founder of one of the largest online alternative investment companies in the United States, I’ve helped countless customers diversify their portfolios with investments in precious metals and crypto during both down and thriving markets. In this article, I’ll share some of my best investment recommendations to minimize your exposure to risk during the pandemic.

As always, the content in this article is for informational purposes only and should not be considered financial advice. Speak to your financial advisor before making an investment decision and do not invest any sum of money that you cannot afford losing. Exercise due diligence and research every investment beforehand.

1. Consider adding precious metals to your 401(k)/IRA.

Gold, silver and other precious metals bullion are among the best safe-haven assets to invest in during times of instability and uncertainty. Since the beginning of the global outbreak of Covid-19, the price of gold has held its value exceptionally well. In fact, the year-to-date value of gold has increased by over 13% at time of writing.

By comparison, the S&P 500 index and the Dow Jones Industrial Average are both down since the start of the year. This attests to the noncorrelated relationship between the precious metals market and the U.S. equities market. When the stock market nosedives, the prices of gold and silver tend to either stay the same or experience upward price movements.

Note that you cannot physically possess or store gold or silver bullion for the asset to qualify for inclusion in a tax-advantaged retirement account. The Internal Revenue Code requires that all self-directed 401(k) or IRA accounts with holdings in precious metals be curated by a licensed trustee or held in a third-party depository.

2. You may want to hold cash.

There’s a reason some of the world’s most successful investors, such as Warren Buffet, swear by taking long positions in cash. Cash on hand can help hedge against risk in the securities market and can reduce exposure to market corrections if they reoccur. 

As of spring 2020, the prominent mutual fund Tweedy Browne Global Value Fund allocated 6.56% of its holdings in cash reserves and short-term debt securities such as U.S. Treasury bills. Although its investment strategy may be too risk-averse for your liking, you may want to take a page out of its playbook and reserve a portion of your portfolio for cash on hand. 

However, there may be negative potential tax consequences of holding on to cash long term. That’s why I recommend checking out Jackson Square Capital’s guide to hedging using option collars for sophisticated investors. 

3. Consider firearm stocks.

Investing in gun stocks certainly isn’t for everyone, but it can present an opportunity to grow your wealth given that crises and uncertainty can prompt firearm stock growth. As we saw at the beginning of the pandemic, there was a significant spike in gun sales in March.

Gun manufacturers American Outdoor Brands Corp. and Sturm & Ruger both posted double-digit month-over-month growth in April (14% and 17%, respectively). For this reason, it might be a good idea to consider blue-chip firearm equities that can provide a bump to your portfolio. 

4. Don’t overlook cryptocurrencies.

For over a decade, investors have questioned whether cryptocurrencies and blockchain-based digital assets such as bitcoin and ethereum are legitimate hedges against inflation or merely speculative bets. Although I don’t expect this debate to find resolution any time soon, the point remains that bitcoin has performed comparatively well to many traditional assets over the course of the pandemic.

After a backlog of overnight liquidations in March, the price of bitcoin (BTC) fell below $4,000 before rebounding back to over $9,000 per BTC in May. Clearly, bitcoin is a highly volatile asset. However, BTC has outperformed the stock market since the outbreak of Covid-19. This year, the price of BTC has fallen only 5% compared to the MSCI All-Country World Index, which posted a 16% drop.

5. Reconsider emerging markets.

A McKinsey Global Institute report found that seven emerging (i.e., not fully developed) economies consistently outperformed U.S. growth in the period from 1965 to 2016. The report found that emerging “outperformers,” such as Indonesia and China, scored better than developed economies in terms of digital disruption, innovation practices and investment speed in 2017. 

However, recent global events have cast doubt on whether emerging economies will be able to function efficiently in the coming months. A recent report by the Harvard Business Review found that emerging market countries are at a high risk of overwhelmed health systems, capital flight, unsustainable debt levels and millions of lost jobs. Together, these systemic risks jeopardize many projects and private investments in emerging markets.

6. Consider tech stocks.

With much of the world’s workforce working from home, equities in the consumer tech and high-tech sectors have performed exceptionally well since the outbreak of Covid-19. Technology stocks such as Zoom Video Communications (ZM), Microsoft (MSFT), and Slack Technologies (WORK) have all seen consistently upward price movement since mid-March as investors look for companies positioned to perform well in both “normal” and work-from-home economies.

Invest wisely for a pandemic-proof portfolio.

Although no allocation strategy is free from risk, there are steps you can take that may minimize your exposure to systemic risk, inflation risk and market risk. During a global pandemic, it’s especially important that you consider these options so you can accelerate your financial recovery afterward. 

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.