The death toll from coronavirus (COVID-19) makes investors worries. Thus, they divert their funds from risky investments to safer investments.
As a result, investment bonds and stocks have corrected. There are many world stock exchanges experienced weakening and stock prices plummeted. However, investing during a coronavirus outbreak is not a mistake since there are many advantages that you can get if you start investing during this condition.
Check out the following tips on investing during a coronavirus outbreak:
Checking the risk profile first
Even though the capital market is very volatile and has fallen sharply since the beginning of the year. You should be calm in making investment decisions and don’t do panic selling.
Before selling your investment, you first need to check your own risk profile again. If the loss you face is more than the tolerance limit you can accept, then you can sell part or all of your investment at a loss position to avoid greater losses. This strategy is also called cut loss.
However, if you can tolerate the losses, you can extend your investment period because capital market investment is for the long term. Thus, you can get optimal profits if the investment time is long term.
Investing at the right time
Every moment is a good time to invest because you never know the condition of the capital market going forward. According to Busiiness Insider, waiting for the best time to invest just means you’re missing out on potential returns in the meantime. For example, no one knows that this year there is a corona pandemic that is capable of destroying the capital market, even though we know at the end of 2019, stocks and bonds closed with satisfactory results.
When stock prices plummet, this is the right time to buy shares. Because good stocks that were expensive are now being discounted compared to prices before the coronavirus broke out. When the market is sluggish like this, you also have plenty of time to observe fundamentally good stocks.
However, when you decide to invest, do not invest at once. Since the COVID-19 pandemic has not over, the market will still be volatile. Thus, you should invest gradually to get maximum results.
Using funds that have been prepared
You must have the right investment goals and allocate special funds to invest. During an uncertain economic situation right now, use more funds that are intended for investment. Do not use funds for daily needs, savings, or emergency funds to buy shares.