Financial Expert Advice on Keeping Investments Safe Amid Corona Crisis
The COVID-19 pandemic has wreaked havoc on the stock markets. The first to take hit was oil prices that took a sharp dive closely followed by the stock and equities. The second week of March saw the worst sell-off that was mostly induced by the panic caused by the aggressive spreading of the virus in more than 166 countries, leading to nationwide lockdowns on a global scale. Even the digital currency market saw its lows, which, however, is currently showing signs of recovery.
The current scenario has sparked panic and anxiety among investors, especially the newbies, who had been profiting well until now, owing to the consistent bullish trend in recent years.
Financial experts are yet to raise alarm and going by the ‘let’s wait and see’ policy. According to them, this is not the first, and this won’t be the last time that the markets went bear.
In such times, what matters is the strategy that one implements in protecting their investments, and that’s what we will discuss in this write-up.
The Corona Induced Market Crisis
March started with the World Health Organization officially declaring COVID-19 as a pandemic. The world saw its worst-ever losses in stock market history since 2008, which was followed by the Dow Index plunging into a bearish zone.
If we go back in history, pandemics like HIV/AIDS, SARS and the likes of it had almost the same impact on the market with AIDS having the longest which lasted for about 5 months.
Financial experts are advising that instead of panic selling, it is time to find the right opportunity to add more exposure to the investments and wait for the markets to revive.
Financial Advice by Market Experts
When time fails to be on your side, it means that you need to diversify your strategies and go into it at a gradual pace. It is the timing that matters. Investors should always be ready for market volatility because it is a fact, that the tables can turn against you at any time.
Although the recent situation is of extreme volatility, all hope is not lost yet. The key is the start is small and keeps diversifying across equities, bonds, gold, and cash. Here are a few handy tips:
- Gradual Contribution
Here we are referring to the dollar-cost averaging strategy. It means that one has to invest a certain amount regularly on the same product for the long term. That way, one can buy more when the cost is low and fewer units when the price is on the higher side.
- Make the Compound Interest Count
Time is of the essence when you are investing in the market. One should try to earn extra interest over the interest received by staying focused on a long-term investment.
- Diversify your Assets
It’s not just diversification of assets, one needs to take a look at passive index funds or ETFs (Exchange Traded Funds) as well. That way the investor gets his/her hands on a wide array of stocks.
Many experts are holding this notion that the recent market low can be a good opportunity in guise for the new investors, as they have a long timeline ahead of them. It is best to hold tight if one already has a stake in the market and wait for the revival.
If history has shown us anything, then bouncing back is in the DNA of the market, no matter how hard it crashes. This too will blow away, till then just batten down the hatchets and refrain from panic sell-offs.