The Coronavirus has been declared a pandemic by the WHO and the stock markets are bleeding since the “Black Monday” crash of 1987. People are piling up basic supplies in case they need to stay at home for longer period of time. Schools and Malls are closed, vacations have been postponed, conferences called off and the worst of all….Stock Markets are bleeding.
So, when the world out there is worried about the corona virus how is it that you can use this scenario to your advantage???
It’s the time to give yourself a sustainable wardrobe….!!!!
If you are already an investor in the stock markets then this disaster might be troubling you big time. But if your long-term goals didn’t change today, your investments shouldn’t either.
Here are some important takeaways from the current scenario:
- DON’T PANIC: First and foremost stop getting troubled….remember this phase is temporary and off course the reason for the meltdown is known: Corona Virus…The major issue in this state of affairs is that Blue Chip companies are at loss due to restrictions in logistics supply chain leading to enormous quarterly losses, so for the time being most of the FIIs have withdrawn money from these companies and invested in bonds and Fixed income generating assets.
So, once this situation subsides and things get back to normal trajectory we will witness a huge inflow by FIIs and the markets will surge again.
- DON’T SELL OFF YOUR INVESTMENTS: Do not go selling equities when markets are in such a bad state. Remember the Bull….People who have money are actually investing right now, because they are thinking of taking advantage of the current scenario by buying when stocks are crashing, buying at lesser price can give you very, very good values in future. So, if your portfolio is bleeding and you have some money at your disposal then try to average the stocks. As someone rightly said, “This is an event-driven bear market and an event-driven bear market tends to recover all their losses within 15 months,”
- BUY THE DIP IN STOCKS AND THEN SELL THE RIP HIGHER – BANK OF AMERICA: According to Bank of America, “investors should be prepared to purchase the sharp pullbacks and then sell as markets surge higher thereafter.”
We know that stocks can fall by 5-20% or more very quickly, driven by unending news coverage and travel restrictions but don’t forget that it also happened in 1987, 2001 and 2008. But, things always get back to normal when it comes to Stock Market.
Moreover, stocks have always delivered great gains over long periods of time to people who persist and do not surge with the sell off sentiments, and successful investors always make the most of this bear phase….when prices are low.
Take a look at below data for your reference:
Source: Social Media
- GOLDEN OPPORTUNITY FOR YOUNG INVESTORS:
My advice to young people is that this is the time when you can enter the stock market and park your long term funds. After all, you have the ability to recover from a number of bear markets and when you still have time to spare some good money before expenses start piling up, lower stock prices are your friend. But remember, to invest in sensible Portfolios and take less risk before you understand the intricacies of the market. Since, you have decades ahead to allow your money to grow so be a bull and make the most of this opportunity.
Investors who will be able to withstand this downturn will not only create wealth but will create miracle also…!!!