Every sphere of mankind has been affected by the outbreak of coronavirus pandemic. The implication of this outbreak is much larger than the previous ones like ebola, SARS, swine Flu, MERS or bird flu. Moreover, the coronavirus outbreak has a lot of factors by its side that has been adversely affected by its outbreak: the Healthcare sector, entire cities across the world under Quarantine, spreading rapidly with each passing day and environmental impact. The stock market is also one of the segments which has seen the greatest volatility in the last few months as even the strongest economies of the world, like the USA, have been jilted due to the outbreak of the virus.
Investing cautiously during Coronavirus outbreak | Invest in Gold in India
Going by the predictions
To believe the predictions, the coming week would again be volatile for the stock market as the implications of rising cases of coronavirus- affected people across the globe and oil rise slumping are frightening investors. Especially new investors are more stressed and feeling anxious.
See the pandemic as an opportunity
History is proof that stressful time makes up a very good investment opportunity for the stock market and gold investors. Investing in low priced stocks or cheap cyclic stocks is never fruitful. Investment markets have always rewarded long term patient investors. And, it is always advisable to make money owning a great bunch of Indian companies and ignoring the current inevitable ups and downs of the market.
Good stocks have always appreciated over time and have rewarded their investors.
So, if you would invest now in good stocks, in about 20 years from now you will surely make good profits.
This pandemic is a natural event that has created a great opportunity for investors to create wealth with the review of the next 10 to 12 years in the mind.
Good quality companies will surely come out of the pandemic effect in years to go and then their stock prices will inch higher. In 5 years from now, you will be able to look at this as the best buying opportunity.
Words of caution!
The price of stocks have been beaten down but it is not advisable to invest looking at this scenario alone.
It is important to buy the right businesses which can survive the tough time. Several businesses existing today may not be surviving 5 to 10 years from now which means the destruction of the wealth.
Additionally, people are tempted by the great fall in the price of some renowned companies as it happened in the case of Jet Airways, DHFL, and RCOM during the past few years. If the price of a renowned company has fallen from Rs 1000 to 600, it might become zero too.
So, it is very important as an investor that you build your portfolio around a solid/ Blue chip business even though their stock prices are highly-priced in comparison to its peers.
Panics are usually great times to accumulate compounders. An investor should take the help of a fully knowledgeable relationship manager with the investment management companies to file shares that would create wealth in the long term.
The stock-specific approach in both the large caps and mid-caps is expected to perform well in this market.
An investor should thoroughly investigate the company’s perspective before investing in equity and should allocate capital which is not needed for 3 years to go at least. Most of the losses made at this point will be recouped over time.
To invest in mutual funds, an investor can opt for STP: Systematic transfer plan option or SIP: Systematic investment plan option.
To invest in Mutual funds investments, ET Money APP is an option.
Investing in gold
Global investors view gold as a haven in case of a crisis. According to the analyst, the precious metal acts as an effective portfolio diversifier. As a sound investment, it offers shields against inflammation and is often considered as the last resort for investment during economic uncertainty. In the case of this pandemic, investment advisors are suggesting an investment in gold exchange-traded funds (ETFs) and/or gold saving funds as the smartest way of investing in gold. Make sure to invest 10-12% of your total investment in gold as gold has rewarded buyers, always in the long term.
Make use of the app – Phone Pay, Paytm, etc to make the investment.
Don’t miss the opportunity to create a strong investment portfolio!