Relax: Saving and Investing Tips During the COVID-19 Crisis
Financial uncertainties abound as the coronavirus pandemic has shut down the world’s economy for an unknown period of time. There is reasonable cause for concern in these uncertain times. Nobody knows when (or if) the economy will return to normal.
You might be asking yourself, what will happen to the stock market? Should I sell my stocks while I have the chance? Should I continue investing or wait until things settle down?
While fear is a natural response, you don’t have to let stress and worry undermine your financial life. Here are some stress-free investing tips for these uncertain times.
- Listen to your personal financial advisors
If you have a financial advisor, consider their advice with an open mind. If you don’t have a personal financial advisor, look for content published by top financial companies online. Seek advice from financial blogs dealing with your particular investment strategy, whether you invest in real estate, futures, CDs, or any other type of investment.
If you don’t have a financial advisor, investment advice specific to the coronavirus pandemic is easy to find online. For example, while tracking the coronavirus’ impact on futures trading, RJO Futures continues to publish a collection of resources for navigating the futures market during this pandemic. One article describes several long-term opportunities developing out of the COVID-19 pandemic despite the low demand for commodities.
The future of investing might be uncertain, but there are still ways to play the game.
- Take a break from your usual investment strategies
Be prepared to take a break from your usual investment strategies. Put your financial strategies on pause until you can make strong, informed decisions.
Successful investors are not jumping back into the market with both feet. While some investors jumped back in after the stimulus package was announced, others remain cautious. Even with a stimulus, nobody knows what the economy will look like when all industries reopen for business.
Even though survey data shows 31% of millionaires expect a rise this quarter with one-third expecting a 20% market gain, it’s still questionable. History has shown that in the last two bear markets, the first comeback rallies were followed by sharp declines all the way to the bottom. This is the same pattern seen between 2007-2009.
If you feel an immense amount of uncertainty, put your investment strategies on pause.
- Look for startups with a promising post-pandemic future
While nobody knows what a post-pandemic economy will look like, we do know that certain businesses will be in high demand. The obvious businesses are medical supply companies, but there are more.
Look for startups that support home delivery and curbside pickup for businesses that would otherwise not offer these features. Other startups to look for are ones that support remote teams. These startups might be software companies, job posting platforms, or project management startups.
Perhaps the most popular type of application right now is telemedicine, also known as “doctor on demand.” Many telemedicine app companies have been scrambling to scale operations to meet consumer demand.
Look through this list on Sifted.eu to see which companies are thriving and which industries are struggling. This list is a good indication of which industries will be profitable post-pandemic. Most post-pandemic profitable businesses will be the same companies thriving during the pandemic; people in a post-pandemic world will continue avoiding unnecessary personal contact.
Any business that figures out how to offer their services online and/or without human contact is probably going to be profitable long-term. Of course, you should always consult your financial advisor before investing in a startup.
- Continue saving money during the pandemic
It’s important to continue saving money during the pandemic, even if it’s only a fraction of what you’re used to stashing away. You can save money even if you’re working less or are on unemployment. Don’t break your habit.
If you need to downsize your grocery list for a while and eat simple meals, make that sacrifice. During the Great Depression, meals were simple and families foraged for edible plants and flowers to add to their meals. If people survived the Great Depression with simple meals, you can, too.
- Don’t touch your savings account
Try not to dip into your savings account at all if you can help it. The only time you should touch your savings account is if you have absolutely no other option and you must pay a bill or buy food.
Remember: this is temporary
The coronavirus pandemic won’t last forever. Just like the Great Depression and the recession of 2007, things will eventually turn around. Until then, relax and be patient. You’ll be back to investing sooner than you think.