Tips for Investing in the Stock Market during the Coronavirus Pandemic
Now that we’re in the heart of coronavirus pandemic, you might be wondering how to avoid further losses. While no one investment technique will protect you during this time of volatility, these following tips can help earn more reliable returns on investment in the new bear market.
Tip #1 – Do Nothing
This may feel counter-intuitive at first. Doing nothing and watching your stock portfolio valuations go up and down at times may be hard to watch. But as past recessions both large and small have taught the experts, selling off a majority of your portfolio at a time like this means you’ll never get a chance to recuperate those losses down the line.
Simply put, dumping Italian or Chinese investments at this time means that you won’t be able to benefit when those countries’ economies rebound in the future. Similarly, if you jump ship and move your investments to gold, for example, you’ll find your assets sunk into an investment that pays few dividends during a growing economy. If you do nothing, you’ll at least know that you still have worthwhile stocks in hand when the economy rebounds.
Tip #2 – Set an Entry and Exit Time
You’ll need at least some plan for timing the market when it is volatile. To do that, you should avoid playing the guessing game. You can prove that old investing adage true – “time in the market is better than timing the market.”
Tip #3 – Don’t Let Volatility into your Head
If you’re feeling the effects of the recent market crash don't let the trend emotionally drag you down. Not only is that bad for your mental health, but it will also harm your ability to invest rationally later on.
The Bottom Line
Regardless of how you choose to do it, be sure to keep your long-term investment goals in mind. Over-reacting during a market crisis like this can put those goals in jeopardy fast. Instead, keep a good head on your shoulders and try to make the best of this difficult time.
*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2014-2020 Advisor Websites.