Hypothetical scenario: I strongly suspect that within the next few months, a relatively wealthy, medium-sized faraway country will experience a severe economic downturn, collapse, maybe even civil war... I'm unsure how bad things will get, but I know they're going to be bad. Furthermore, I believe that the crisis will originate in a particular important sector of the economy, e.g. agriculture. Suppose that I live sufficiently far away that any fallout from this crisis will not affect me very much.

What would be a profitable, relatively safe investment strategy in such a scenario? Let's say I have a moderately large amount that I want to dedicate to this (e.g. $250,000). Clearly I want to diversify, but I'm curious what methods and which instruments people choose in such cases. I was thinking about the currency of the state in question or stocks of the main agriculture-related companies located there.

closed as off-topic by Dheer, JoeTaxpayer Mar 4 '18 at 17:32

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  • If you know it, then you can try to find out what will go up and buy it today cheap. Find what will go down and short sell / forward contract it . – Dheer Mar 4 '18 at 16:04
  • 2
    Seems kinda nitpicking and 'Big Brotherish' to put question on hold since it is indeed about: (1) Securities trading and investing, whether long- or short-term, as practiced by retail traders and investors and (2) Investing and trading strategies. – Bob Baerker Mar 4 '18 at 21:42
  • @BobBaerker yeah I don't know what gives. I've seen people ask for investment advice or strategy plenty of times on this website, which is why I made this post here. – Spine Feast Mar 5 '18 at 11:36

Sounds like a homework assignment...

Use ETF.com to screen for ETFs based on that country (eg. Brazil, Spain, Taiwan, etc.) or screen for currency ETFS (eg. Yen, Pound, Krona, etc.).

Use FINVIZ.com to find stocks based in other countries.

There is no relatively safe investment strategy. All involve varying degrees of risk and reward. In order to profit from such a collapse you could short stocks, short ETFs, buy inverse ETFs, buy puts, short futures, etc. Futures and options would offer the greatest bang for the buck with options having a capped risk.

  • Thanks for the answer. I wish I was still the age where I'm given homework, but sadly that ended a while ago. Out of the possibilities you mention, which one would you say is optimal for someone with no experience? I heard that futures and short trading requires a ton of knowledge not to get burnt – Spine Feast Mar 5 '18 at 11:38
  • No investment/speculation is for the inexperienced and this is surely a long shot one. Noobs should avoid short trading and futures like the plague since they both require disciplined risk management. If I had to pick one, I'd go with buying put options because they limit your risk. You're likely to lose the entire bet unless somehow this tail risk event occurs but nothing more. It's kind of like a long shot bet on that 100 to 1 horse at the race, though in this case it might be a million (or more) to one :->) – Bob Baerker Mar 5 '18 at 12:15

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