Some investors feel very disadvantaged because of COVID-19 risk to their investments. However, some of them also feel lucky because they can start investing at a relatively low price.
In the current co-19 pandemic situation, many investors think that stocks and mutual funds can still be investment choices. Thus, many professional and novice investors decide to start investing in the current pandemic situation.
Let’s look at some of the following tips so you can minimize COVID-19 risk to your investments:
Focus on long-term investing
First, you must focus on investing long-term or investing for more than two years. Thus, you have to use money that is not used daily. You can use dead money or money for the long term.
This is because we cannot predict how long the pandemic outbreak will end. For example, the Corona outbreak will subside by the middle of this year, and conditions will recover in six months. After that, in one or two years the value of the shares began to rise again.
Thus, you, as an investor, should not focus on monthly interest but you should focus on increasing value in the long run.
Prepare a Reserve Fund
According to Investopedia, a reserve fund is savings that set aside by an individual or business to meet any future costs, especially those arising unexpectedly. Thus, you must still prepare a reserve fund before buying an investment product. The reserve fund can be in the form of cash or gold which is relatively easy to be disbursed compared to shares. The reserve fund is around three to six times the monthly expenditure.
People who will invest can guarantee their minimum life in the next six months in these uncertain conditions.
After the minimum reserve funds are met, you can use the money left over for long-term investing. To choose the right product, you can choose investment products that are currently down in value, such as stocks and mutual funds. Because, when the economy recovers, two products whose value is currently falling are expected to soar.
If other funds have not been used, they can also go into gold, fixed-income funds, or bonds. However, the increase will not be high anymore.
Read more: Stock Investment Tips for Beginner
