You can amass a fortune or make a considerable loss during volatile times through investing. The outcome depends very much on your decisions and your ability to remain calm and rational. The question is, how do you invest wisely in a volatile market amid a global virus scare?
Here are some suggestions.
1. Invest in companies paying dividends
There are companies out there who will pay a dividend to their investors over time. These companies can do so primarily because they consistently grow their profits over time. They are also firms that are longstanding in their respective industries and have proven time and time again, their profitability and ability to perform even during troubled times. The coronavirus is going to stay for the next few months, and businesses who are not already growing may face challenging times ahead. Investing in companies that have been consistently growing is an excellent way to keep your investments safe even in volatile times.
2. Invest in basic-need goods and services
Businesses who provide basic-need goods and services will always be in demand. Investing in a company that offers such products and service safeguards your money as they are hardly going to be impacted negatively by the coronavirus. In fact, if any of the panic buying is an indicator, these companies are making better profits than they usually do.
3. Remove risks in partial
If you have already invested and are worried that your investments will fail, you may be tempted to withdraw all your investments. While that appears to be a sound decision at this point in the coronavirus scare, it may prove to be a bad one further down the line when you wish to re-enter the market. You will be facing a “sell low, buy high” situation. What you can do to reduce the risk is to cash out on some investments, and keep the rest as they are. When the market rebounds, these stocks will still be yours to keep or sell.
4. Be thoughtful, not fearful
Investment plans and decisions depend on your age. If you have decades to go before retirement, and a solid investment plan, continue to do what you do. In fact, you could consider increasing your investment amounts as you are likely to spend less on consumable goods at the moment. Do not let one event affect your investment plans. For those who are closer to your retirement age, be calm and carefully look at your portfolios. You could consider switching your investment mix to a more conservative allocation by buying into basic-need goods and services.
Remember that the stock market will rise and fall according to market forces that you cannot control. A wise decision in investment is always diversification. Your portfolio should always have a mix of both risky and relatively safe investments. Stick to your investment plan and don’t let fear puts you into a swerve and a skid in these volatile times.