Warren Buffet says, “Be greedy when others are fearful and fearful when others are greedy.”
For buying stocks, amid the COVID-19, it seems like the biggest stock buying opportunities of a lifetime. The indexes have seen crazy point swings before, but should I be investing?
It has been rare to see ‘bear markets’, in the last ten years and it certainly is a lifetime opportunity to invest money, if you have money and would like to invest.
What appears to be happening is a rare sight, the stock markets in March 2020 are crashing? But is it dreadful? Is it the right time to start buying or wait? What happens next?
With stock markets anything and everything is possible, but as long as you play with your money safely, you are good. For buying stocks, it is a convenient rule: “Buy low, sell high.”
Not everything can be explained and summarized, especially the trends of stock markets, and why they go up or down in sizeable points.
For those who have not been affected by the coronavirus, face new challenges during the pandemic. Therefore, if you are planning to invest your money, it is no easy to buy stocks with all your money.
Money in Hand
The first thing to keep in mind when investing your money is, how much money do you have in hand? If you have money that you will need or may need in the coming six years than keep in mind that once you invest in stocks, there normally are no returns or gains on investments quickly.
You will have to wait some time and this can put you in a tough situation. But if you have enough money to afford and the extra money is what you want to invest that surely stock markets are the best place to invest.
Are Stocks Risky
Those who are going to invest in stocks are people who are simply getting into a cave without a torch because they are sure, that they will be able to come out after a while on their own because they know the passages of the cave.
If you are someone who does not have enough money for expenses and wants to invest in a venture. Remember, if you invest in stocks, and they go down, if you need money you would have to withdraw and that will be a loss. Only invest, if you can wait for as long as it takes for your investment to grow.
With coronavirus pandemic, we stand in the middle of a warzone, and we don’t know when the war will end. You may lose an investment, a job, or get sick. To stay ready for anything that comes next, you should have enough money for at least three months. You should ensure, that you have enough cash to manage the household and other medical expenses.
Stock Prices Falling
Since the black swan of coronavirus busted the bull party, the stock has been going down with each passing day. You can never tell when is a stock is at its lowest.
If you have been in stock markets, then all of this must be very hard for you to take. The stock markets take a dip almost every year. But ‘bear markets’ are occasional and happen almost 3.5 years later. With pandemic at hand, the stock markets have gone 20% down, that indicates it has become a bear market. It, therefore, creates the best investing opportunity of a lifetime.
Create an Asset Mix
Realistic investors do not expect overnight returns, they balance the impact of volatility by efficiently allocating their assets where they will bring better returns. In crucial times, when the stock market is shaky, a mix of right assets can also improve the overall returns on the total investment.
For example, a person has an investment horizon of 20 years, if the markets are volatile, nothing will matter to him or her at all. If you take a closer look at successful investors, you will be able to notice that the asset allocation strategy can help people come to the top. A good asset allocation strategy can help investors win in the long term because compounding of interest occurs in the long-term.
The pandemic that has taken over the world is real, and it is around us too. No one has found a solution and panicking is useless. It is now important than ever to look for a solution and stay sane.
Business, markets, people, and everything is affected by the pandemic. Recognizing the new, big, and unknown is the only option. Because the problem is new, its solution should be innovative as well. The situation demands the investors and all individuals to think differently. So, drop tactical thinking and prepare yourself to dive into the stock markets with a different, and new approach.