How To Manage Investment During Covid-19 Pandemic?

. 6 min read
How To Manage Investment During Covid-19 Pandemic?

Best Investment Options In India During Corona.

  • Coronavirus pandemic has changed the lives of people around the world in numerous ways.
  • This unprecedented situation has also caused a great deal of economic disruption.
  • It would be an understatement to say that investors are left puzzled about what comes next.
  • Even with the pros struggling to manage their investments and planning new ones, new investors might be having a hard time.
  • One must understand that during such economic unrest, some markets should be left untouched.
  • At the same time, some unexplored realms are opening up.
  • So, the good news is that, yes, you can still consider a whole lot of investment options.
  • You might have to take it slow but do not let your hibernation strategies hibernate.
  • As some people are adjusting to the new normal, and as there is no predicted trajectory to this pandemic’s end, it would be better to work on a robust investment plan.
  • Your investment strategies should be fine-tuned in such a way that you can reduce the losses even if you cannot make profits, even if such unpredicted bear markets come up.
  • To manage your investments during the Covid-19 pandemic, you should avoid grave investment mistakes that most financial experts warn against.
  • You should also make the right investment decisions and be open to exploring new markets and entities in your investment plan.

Mistakes To Avoid During Times Of Uncertainty

Investing Only In What Is Considered “Safe Investment”

  1. Some people quickly move their investments from their usual segments to the less volatile asset classes.
  2. From real estate, gold to other options, each investor might have his preferences.
  3. But bear markets should not be ignored.
  4. Do not rush to move everything to the asset classes that are usually labeled as fewer risk investments.

Giving Up On Your Equities

  • Drastic equity sales happen during such pandemic due to impulsive decisions.
  • Some investors rush to sell their equities looking at the losses, reflecting in their portfolio.
  • To begin with, you should assess the risk in various equities and only pick those where you can afford the losses.
  • If you have not done this in the past, do not hastily sell off your equity holdings without letting the market stabilize a little.

Ignoring The Importance Of Retirement Funds

  1. Some people jump to liquifying their retirement funds when the market crashes.
  2. As liquidity on these funds increases due to relaxations, you should not withdraw them unless there is a dire emergency to handle.
  3. It is not easy to accumulate your retirement funds over the years.
  4. Securing the future still matters a great deal even during market fluctuations.

Investing In Too Many Or Too Little Stock Options

  • Some investors fear the stock market and stay away from it when such bear trends pop up.
  • There are others, who are over-optimistic and invest in too many stocks.
  • Both can be bad for your investment portfolio.
  • If you miss out on the bear trends, there could be potential stocks that otherwise cost a lot of money.
  • Some stocks, on the other hand, might crash big and might not essentially recover soon.
  • Some might not recover at all.
  • As the global scale of market disasters like the present are rare, it is hard to predict what kind of businesses might bounce back.
  • So, avoid investing too much in stocks, especially when you are not sure about the business.
  • Technical analysis alone would not be useful in such cases.
  • You need a thorough fundamental analysis to study the business objectives and how it survives the competition.

Not Seeking Financial Advice

  1. Professional investment counseling might not always be essential if you have sound financial knowledge.
  2. Even if you have been studying and understanding the market for several years now, investment advice matters a lot, now more than ever before.
  3. When you talk to investment counselors, you will get plenty of useful tips about markets less explored.
  4. You would, therefore, be able to diversify your portfolio better.
  5. Tapping into the market during such time helps you maximise the gains without having to spend too much.

What Should You Do Instead?

Understand And Acknowledge

  • Pandemics like these bring recessions like never before.
  • There could have been major market breakdowns in the past, but the investors who currently have their funds in the various asset classes might not necessarily have experienced the past economic crises.
  • Every such market crash could appear like a new lesson.
  • Acknowledge the fact that most investors might have made losses big and small during pandemic situations.
  • What matters is how you plan to get out of the situation and make up for the losses.

Avoid Emotional Decisions

  1. Panic buying and selling of stocks and other assets would be the major driver for long-term losses in investment.
  2. To become a better investor, you should always leave your emotions outside the room before you sit to make a financial decision.
  3. From deciding which asset classes to work with to plan your budget, you should pay attention to every little detail without emotionally being drawn to the losses you have made.
  4. Emotional reactions might lead investors to withdraw from potential markets upon looking at the momentary losses made.
  5. There might come a time in the future where these investors might regret having made a hasty decision.
  6. Understand that even the robust performers in the stock market might witness market dips with the global economy changing, but some businesses might be back with a bang.
  7. You might have to wait it out to make profits that make up for the losses that occur now.

Mutual Funds And SIPs Are Still Valid

  • Do not underestimate the power of mutual fund SIPs even during pandemic times.
  • Mutual funds are more profitable when you leave them undisturbed for a long time.
  • Make sure that you do thorough research and then pick the most profitable and the least risky mutual funds for your portfolio.
  • Do not judge the performance of the chosen mutual fund SIPs by the losses or profits you make now.
  • This can again lead to the hurried closure of mutual fund investments.

Understand The Long Term Results

  1. When things are uncertain, you should only look at what could happen in the future.
  2. If you keep a close watch, you might come across new IPOs being listed as new ventures or even the traditional ones go for diversification of their funding strategies.
  3. Look for businesses that have survived the pandemic situation well.
  4. There could be some sectors like healthcare, for example, that have risen rather than facing losses.
  5. Invest in such markets to make better profits, if you need short term results.
  6. If you do not have the time to watch the market and make quick decisions, look at the ones that show growth potential.
  7. Some businesses have chosen to expand their product lines or diversified the scope of their services.
  8. Such businesses might make slow but steady progress that might result in earning you better profits in the future.

Think Global

  • Global markets are the best options as you would be able to tap into the bulls and bears from various regions.
  • Some countries have already started regaining their normalcy while others try to cope with the pandemic.
  • A global scale of investments would help you in adding the much-needed diversity to your portfolio.
  • This would ensure that your investment can make profits in all types of markets.

Also Read:

Dos & Don'ts For Managing Finances During Pandemic.

The impact of Covid-19 on Small Businesses. How bad this has been?

Best investment ideas during the COVID-19 pandemic


Q- Should you halt your investments during the COVID-19 situation?

Ans- No, you should work on changing your strategies, and should continue to save money and also invest in the right places even during the pandemic situation.

Q- Would stock market investment during COVID lead to losses?

Ans- It is all about the stocks you pick and the amount you invest. Do a thorough risk analysis before you invest in any stock or sell any during the recession caused by COVID.

Q- Should you exhaust your emergency funds?

  • Though the COVID situation does count as an emergency, it would be a bad idea to break your emergency fund unless you have to.
  • From proper insurance coverage to savings, many things can keep you covered instead.
  • You should continue building your emergency funds even during the pandemic.
  • With these little tips, you can transform your investment decisions taken during the covid-19 pandemic situation.
  • Now is the time to focus on your expenditure more than ever before.
  • No matter how your lifestyle has changed, you must understand the inflow and outflow of funds to make better investment decisions.
  • Always remember, while saving money is important, making the right investment is even more important.