When COVID first hit, a lot of fear surrounded stock investing, and some investors chose to cash in and leave before things got worse. Some stocks took a plunge as the pandemic continued, e.g., Carnival Corp. (CCL) and Sabre Corp. (SABR). However, some investors chose to ride out the waves and came out on top. Good examples would be those who bought into Fiverr International (FVRR) and GameStop (GME) when they started gaining momentum in the market. These changes in the market did little to quell concerns new investors had about the market. We cover whether investing during a pandemic is a good idea, what concerns you should address, and some tips investors have used to stay in the game despite the uncertainty that shrouds the stock market presently.
Should you Invest in Stocks now?
A lot is going on in investing circles, and some people even believe that the stock market could come crashing down. Again, there’s no way of telling what could happen in the future because the world is dealing with a pandemic it has not dealt with before. There’s no precedence to help anyone predict the future. That’s the first thing you should keep in mind.
However, there are some reasons to be hopeful about the future. For example, most countries have rolled out vaccination programs to reduce the severity of the COVID-19 variants. The hope is that when most countries achieve herd immunity, more places of business could open up. People can go back to work, start traveling again, and moving goods across borders, thus fueling the economy.
Additionally, governments have soon realized that they can only close businesses for so long before people run out of savings. They are now slowly reopening industries such as entertainment which will continue to feed the economy. Plus, you now have more niches to try out. More eyes have settled on biotech industries that continue to roll out vaccines in light of the vaccination programs and all that surrounds the pandemic. Most of these companies have their stocks publicly listed, and you can get a piece of the cake. Plus, e-commerce has grown exponentially, with more people opting to or being forced to buy things online. It’s expected to keep growing!
Even as hope continues to spread among investors, there’s still a lot you need to think about before buying any stock. For example, new variants keep coming up, and it’s not clear when the situation will improve. Additionally, the stock market has been on the up and up over the last year, and it could fall after a while with more people taking their money out. And let’s not forget the inflationary factor.
What should you look for in stocks?
Before investing in the market, please learn as much as you can about stocks. Start from the bottom, figure out how the stock market works, pitfalls you must avoid, key strategies used, and understand the bullish and bearish markets. Regardless of the market’s stability, you can always end up on the losing end if you rely on other people’s advice too much. The best investors know a lot about the market and only tune in to the general perception about the market for further insight, not as their only guide.
You should also consider factors such as:
- Stability: Suppose a new variant of COVID comes up; how likely is the stock to hold up in the market?
- Cost: At first glance, a stock may look cheap while, in fact, it is expensive because you are not buying a business but rather an index. Ask yourself, in ten years, where will this company be?
- The Long Term: There’s a lot of uncertainty in the market. However, that aside, can you make money against the stock in the long term? Are you okay with losing money when the market falls in the short term? How much loss can you withstand before cashing out?
Are there any strategies you can use to stay afloat?
Yes! Investing during a pandemic is not easy, so the first thing to do is guard your emotions! Investors will have a lot to say and will ask you to pull back or go all in, but you have to make a rational decision at the end of the day. Know why you’re investing, how much risk you can tolerate, how much you can diversify, and most importantly, how long you want to be in the stock market. Also, buy cheap! By looking at the StockInvest site, you can understand which stocks are valued for way less than they are worth. Do your homework, figure out what can make you money, and most importantly, stay calm! It seems like a hard thing to do, but a rational mind is a valuable asset in these times.