Everyone wants to invest in stock markets whether it’s mutual funds, stocks or other security instruments, but they often end up confused and untimely. With COVID-19 forcing people homebound or in work from home situation, what’s better than gaining more insight into whether it’s the right time to invest or not.
Looking at it with the opportunistic and capitalistic mind, with the coronavirus outbreak markets have not only become volatile but also have provided avenues for investing. With the markets taking a downward fall, a good strategy for investing can go a long way.
Here are the few principles to keep in mind while investing in the stock markets which have become highly unpredictable since the news of COVID-19 outbreak hit the market.
- The rule of thumb one should always remember in the game of investing — invest for long terms as much as possible. When you are investing for the long term, one needs to make sure that they have enough cash in hand before locking up the funds in the stock market. It’s not about playing in the market; it’s about playing the long term game.
- Don’t go all-in with your chips when investing. Invest a fixed amount of sum gradually in the debentures or stock of companies so that you can reap the benefits of buying more stock when the price is low and less when the price is high.
- Don’t put all your eggs in the same basket, diversify as much as you can. A diversified portfolio can help you a long way in risk exposure as compared to investing in only one stock. It will not only help you keep afloat at the time of the crash but also will reduce the risk.
Now one may wonder instead of hoarding up the cash in this situation, why invest in the stock markets now?
Well, the experts claim that this is just another cycle where the markets are volatile; it will be back to normal trading and the stocks will rise up. Evaluating the previous patterns, it is seen that whenever the market is down investing in the right stock can bear you more fruits when it’s stable, provided that you choose the right stock.
Even in the past virus outbreaks, markets have fallen but also have recovered quickly. It is expected that once the vaccine has been discovered, markets will be less volatile. Financial specialists are unmistakably stressed over the momentary effect coronavirus will have on the economy, but at the same time, it’s made way for some alluring valuations for great organizations.
While financial specialists ought to be mindful of getting ready for the long stretch, not to surge in investing, a ‘buy on dip’ system might be proposed, given that valuations are more sensible now than a month back.