The world has never experienced a pandemic of this intensity before, causing the economy to crash all over the world. The uncertainty prevails now as well as in the future as well. This brings us to the boiling question. Is an investment in markets during the pandemic, the right decision to make?
There is no straight answer to this as the rise or fall of your investments will depend on where you really choose to invest Currently the market is low which means that you can buy stocks at a much cheaper price but you need to be careful to choose the ones that have a sure shot potential to bounce back. In fact, the market crash is a great opportunity for even beginners to invest if they apply the right strategies as discussed below.
- Take Care of Your Existing Investments First:
If you have already invested in the market, your stocks may have crashed as a result of the pandemic. Make a decision quickly that you wish to continue holding the stock or sell it. Analyze the stocks you hold to understand if there is any scope of it to bounce back. It may be a good idea to hold on to the stock in such a scenario and wait for the pandemic to pass. The market does have a lot of potential to bounce back, but there are many stocks that may never recover as well. If you feel you have a few such stocks, sell it immediately before the value goes down further.
- Learn How COVID-19 will Impact Industries
The first rule of the pandemic is that it will definitely impact the entire stock market. It’s mostly fear that is driving stocks of several companies down. This event will affect various industries differently. A few businesses such as pharma are actually seeing profits and an increase in value.
Learn how COVID-19 will affect the stocks you are eyeing. We strongly suggest you to only invest in businesses that you are able to understand well so you can predict its fall and rise accurately.
- Invest Only Long-Term:
Any investment you make in stocks, you need to be prepared to lock your funds for a long duration if you wish to gain significant profits. And right now, due to pandemic, it is necessary that you invest only if you can lock in the investment for 2-3 years as it will take a few years for the market to really bounce back and do well. If you are patient, you will be rewarded well.
- Buy Stocks of Companies that Will Overcome the Crash:
It may be tempting to buy stocks of businesses that are really low now and had been high sometime back. Just because the business was doing well before the pandemic, it is not necessary that it will bounce back. It all depends on the fact that how the business has managed to hold up during the crisis time and if it has a bounce-back plan. A few businesses may shut down during this time, which means you have to research and invest only in businesses that have a strong potential to bounce back and refrain from buying low-priced stocks blindly.
- Take Expert Advice:
Making the right decision in the investment market is tough and when the market is this volatile, doing it on your own may be too risky. We strongly recommend you take the help of expert online broker AvaTrade to help you make the right investment decisions. Follow AvaTrade on Twitter to know more.
The Bottom Line:
The times are uncertain, and the future is cloudy. The right thing you can do as an investor is strategizing the best way possible but also not invest all your cash into stocks. The best investment you can make right now is to collect an emergency fund for unpredictable times if needed.