- 6 Nov 2020
- Reading time
- 5 minutes
The coronavirus pandemic has had a destructive impact on the economies of various countries around the world, the United Kingdom inclusive. In the UK, the pandemic has reached a critical stage with an average of 20000 people getting infected per day. The usual activities—activities that include travelling for holidays, going to games, camping, et cetera—of the citizenry has come to an abrupt stop since the emergence of the virus.
Moreover, many businesses have had to shut down as a result of the pandemic. Perhaps, the worst effect of the virus on the economy is the uncertainty that dogs business deals that were once considered normal before the advent of the virus: one of which would be investing in new businesses.
There are serious concerns raised in financial markets around the world concerning the second wave of the coronavirus pandemic, and the stock market is reflecting the fears of many business persons in the country. As of September, inflation has increased, with the customer price index(CPI) rising to about 0.5%. There have also been threats of a recession as the recovery from the first Covid-19 lockdown has been flattened out.
All of the above combined with the increase in redundancies, the increase in the budget deficit, the decrease in the GDP growth, et cetera makes it challenging for good business deals to be perpetrated. The uncertainty in this period begs the question: is this the right time to look for new investments?
Should you try to invest during this period?
This year has been an extremely volatile one for the stock market, with various speculations on its recovery rate after the onslaught of the virus. Still, research studies have indicated that more finance and brokerage accounts are being opened rapidly despite the pandemic. The reason for this is that people are hoping that their money grows through the process of compounding returns such that they profit much after the virus is over. This strategy is borne from the fact that no matter how low the market is, it will eventually hit new highs.
With the anxiety and uncertainty surrounding the market, it is up to an individual to decide to invest or not. Perhaps, the understanding that nothing falls forever, and that there will be an eventual rise in the stocks could push a person to get new investments. However, the most crucial factor that should be considered in making this decision is the circumstance of the individual. To make such a decision, you should consider;
The amount of time you have to regain lost wealth or build new wealth
A person who is about to retire, or who is already retired may not have the time it takes to wait for the bear market investments to increase in value. Older adults, most especially, are more prone to stick with low-investments or savings accounts that maintain the wealth they already have.
The status of your present finances
Since many families are facing the problems of job loss and decline in income, this might not be the right time to invest for them. It will be better for such families to work on their budget and negotiate with creditors to reduce their expenses at least temporarily.
How averse you are to risks
Investments are risky undertakings—you are never totally sure of the outcome, and you can only hope for the best. It would help if you understood what you could afford to lose, so you can easily determine the types of investment with which you can be involved.
How do you invest successfully in this period?
Whether you invest during this period or not is up to you, but once you decide to invest, there are many options from which to choose. Some possible investments that you might consider are;
- Buy stocks that have dropped enough for them to be affordable to you, and get them from reputable companies that are more likely to survive the pandemic. You can read through Moneyfarm reviews to get a glimpse of such a company.
- Invest in companies with strong cash flow and stable balance sheets.
- Invest in real estate. This market has survived many a pandemic and still promises to survive more. You should check out the real estate current situation to have a comprehensive view of how your investment can be successfully made.
if you invest this period, you should;
Create an investment plan
An investment plan will help you to achieve your goals faster as it keeps you focused. You should outline your reasons for investing, the type of returns you are looking for, and the number of risks you are willing to take.
Choose investments that meet your goals
You should figure out your preferred investments that meet your outlined goals. Make sure to consider the potential future return and the risks associated with it. You should not also put all of your eggs in one basket, that is, consider diversifying your investments.
Make sure to invest regularly. Forget about the short-term market changes and focus on the long term goals you hope to achieve.
Gold vs cryptocurrency
Gold has always been an excellent investment choice. However, with the advent of cryptocurrencies, your choice of investment deepens. Gold is a good investment choice because of transparency, safety, and legality. It is also a rare commodity valued very highly and very stable. Cryptocurrency, on the other hand, is the new rave of the moment. Like gold, it is a rare and transparent commodity. The only downside with cryptocurrency is its stability and safety. Both of them are liquefiable. As an investor, you might consider investing in gold because of its fewer risks, but cryptocurrencies are a better choice for those who can take more risks.
How online reviews can help you invest better
Experience, they say, is the best teacher. The experiences of others who are in the same boat as you are priceless when it comes to guiding you aright. It would be best if you looked through many investment companies reviews to understand their mode of operation, their terms and their conditions. You can learn of their customer service programs, et cetera by looking through the reviews. BritainReview, the site with the conglomeration of various companies’ websites, present different investment companies with which you can work.
Even without COVID-19, investment of any type is always risky. But at this time when the economy is ailing, you need to get all the facts correctly and be ready for the worst should you plan to try new investment. While things will, no doubt, get better, you must also be prepared to wait for when it will. Our tips in this article will help you minimize or avoid loss if you’re hoping to invest any time soon.