{"id":3266,"date":"2020-07-11T11:14:59","date_gmt":"2020-07-11T07:14:59","guid":{"rendered":"http:\/\/gccexchange.com\/blog\/?p=3266"},"modified":"2020-07-11T11:15:55","modified_gmt":"2020-07-11T07:15:55","slug":"investment-strategies-during-the-pandemic","status":"publish","type":"post","link":"https:\/\/gccexchange.com\/blog\/investment-strategies-during-the-pandemic\/","title":{"rendered":"Investment Strategies During The Pandemic"},"content":{"rendered":"\n

Most people from\nthe world of investment would tell you a single thing \u2014 there\u2019s no time to\nstart investing like the present. However, if we\u2019re being realistic \u2014 the age\nof the coronavirus has shifted the global markets and stock behavior. That\u2019s\nwhy having the proper investment strategies during the pandemic is crucial \u2014\nyou don\u2019t want to be caught unprepared by any abrupt changes. With this in\nmind, we\u2019re going to go over basic investment behavior during the COVID-19\ncrisis.<\/p>\n\n\n\n

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Image Source: Pixabay<\/figcaption><\/figure>\n\n\n\n
Be Reasonable<\/h5>\n\n\n\n

If you\u2019re <\/a>someone who\u2019s a beginner in investment<\/a>,\nthere\u2019s no reason to delay your entry into the exciting whirlwind that finances\nare \u2014 as long as you have a reasonable approach. For example \u2014 you don\u2019t want\nto spend any money until you\u2019re absolutely certain that you\u2019ve got a basic\ngrasp of the financial instruments that you\u2019ll be dealing with. Your\nexpectations need to be in check and within reason, regardless of what stock\nyou want to invest in.<\/p>\n\n\n\n

For instance,\nsuccessful companies like Netflix and Amazon have had their stock more than\ntriple in value over the course of the previous decade \u2014 but this is not a\nstrict norm, and there\u2019s nothing that guarantees their success. It\u2019s far from a\nstraight line, and there are many factors that determine how stocks will fare.\nOver the long term, it also depends on how much the stock market attracts value\nin general. The best results come from patience \u2014 you should expect to make a\nfortune by buying and selling stocks over the course of decades, instead of\nyears or months.<\/p>\n\n\n\n

Emergency Savings<\/h5>\n\n\n\n

Being ready to\ninvest is more than just about knowledge and mental preparedness \u2014 you also\nhave to be prepared in practice. And that means setting up an emergency fund\nthat will cover your own expenses. We\u2019re talking about up to nine months\u2019 money\nfor usual living expenses, that will cover you losing your job or being\nprevented from working due to hypothetical health issues.<\/p>\n\n\n\n

These things may\nnot seem likely, but it\u2019s always good to prepare for them in advance \u2014 you\ndon\u2019t know when something can happen, and if most of your funds are tied up in\ninvestments; pulling out won\u2019t always be simple and easy, depending on your\nliquidity.<\/p>\n\n\n\n

Avoid Debt<\/h5>\n\n\n\n

Not all debt is\nnecessarily a bad thing \u2014 but debt with sky-high interest definitely is. For\nexample, that\u2019s your credit card. With these, you may end up paying 25% worth\nof a fee on a yearly basis. This is a problem if you\u2019re looking to build an\ninvestment portfolio \u2014 depending on how large your investments are, if your\nannual debt fees are 20% while your investments give you 10% in the same\nperiod, your overall worth might actually be shrinking.<\/p>\n\n\n\n

Comparatively,\nlow-interest credit such as mortgage debt isn\u2019t nearly as bad in this context.<\/p>\n\n\n\n

Pandemic Investment<\/h5>\n\n\n\n

Now, how do these\nthings change during a <\/a>pandemic<\/a>?\nAnd how does a global environment with a huge health issue influence your\nchances of earning money through investment? If you\u2019re just entering the\nstock-trading scene, these are all things that interest you.<\/p>\n\n\n\n

Well, for\nstarters, as most people could predict \u2014 the first wave of the pandemic caused\na huge stock market crash. If you take a look at the ten most stable stocks on\nNASDAQ, you\u2019ll find that all of them dropped by at least 10-15% in March 2020.\nHowever, this is simply the sign of a market shocked by the sudden burst of the\npandemic; in most cases, it\u2019s not a predicament of the companies themselves. In\nthe span of weeks, most of the stronger companies managed to regain the worth\nthat they\u2019ve lost.<\/p>\n\n\n\n

Industry giants\nlike Amazon even saw their shares raised to a record high; though this is\npretty understandable, as the quarantines caused by the pandemic saw people\nordering more stuff online than ever before.<\/p>\n\n\n\n

With all of this\nin mind, there\u2019s still one crucial matter to keep in mind \u2014 your emotions have\nto be completely in check. This is a trait that\u2019s generally something excellent\nfor any kind of investment you can make at any time, but at particularly\nvolatile times it\u2019s even more important. If a sudden dip happens, don\u2019t allow\nfor panic and fear to guide you into selling the stocks of companies that are\ngenerally growing, healthy, and unlikely to be affected by the pandemic in the\nlong term.<\/p>\n\n\n\n

Additionally, for\npeople who believe that they\u2019re too nervous to begin investing in such a\nstressful period; you could always wait for things to calm down. Sure, it\ndoesn\u2019t seem like COVID-19 is going away any time soon, with no vaccine\nappearing before 2021 in the earliest; however, as with all other aspects of\nmodern life, the markets will eventually adjust to this new reality. Should the\ncoronavirus situation persist in the next year or more, new waves of the\npandemic won\u2019t make such a huge splash in the financial markets.<\/p>\n\n\n\n

Play When You Can Lose<\/h5>\n\n\n\n

At the end of the\nday, there\u2019s one investment strategy that you need to pay heed to regardless of\nwhether there\u2019s a pandemic out there or not: don\u2019t invest any money that you\u2019re\nnot prepared to lose. Or, rather, make sure that you won\u2019t need that money in\nthe next five years or a decade. Trust us, while sometimes selling stocks during\na market crash can be the only course of action, it\u2019s not something you want to\nbe forced to do.<\/p>\n\n\n\n

If you\u2019ve got\nnerves of steel, investing during the pandemic can be a good opportunity \u2014 but\nnever lose sight of the big picture when it comes to financial markets, and be\nprepared to weather the storm without losing your livelihood and savings in the\nprocess.<\/p>\n\n\n\n

We hope that this guide was useful to you and that you now feel more confident about the investment strategies that are best applied in the time of a pandemic. Most of all, make sure that you are staying safe in these times we are going through. Have a good one, guys!<\/p>\n\n\n\n

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