Long Term Investing Amid COVID-19
Well, here we are. Financial markets have shown their fury, and we have seen several industries plummet amid the coronavirus pandemic. Some of these companies were supposed to fall in a scenario like this, albeit others did not deserve this kind of a scenario to play out.
Investors both in the U.S and abroad have seen big shocks in their long term portfolios. The key here is to stay between the means of rational thinking. Looking at the virus and the pandemic that has been caused as a result of it, which companies do you think did not deserve such price movements. Most of my portfolio, to be honest, my portfolio was supposed to hang in there with all the diversification it had, but it didn't. So now is the time to look at stocks that are heavily discounted and show superb opportunity for buying. What are these? Well its the whole market, ranging from tech to consumer cyclical. What investors with long term horizons need to realize here is that there will be numerous other catalysts that drag down your assets. The most logical thing to do: keep up with the habits that got you here. Max your contributions. Ergo, this will result in dollar-cost averaging. Your average cost figures will come down dramatically considering the damage that has been done in the markets. For your individual picks, look for companies that carry sustainable moats within whichever market they operate. These enterprises tend to stick around the most and are less throne to going under in market anomalies, similar to the one we are in.
Most of you utilize index funds, this is the best way to go about your retirement planning. However, there are minor tweaks you can perform in order to benefit a little more. There are index funds that focus on market segments, these can be tech funds for example. If you think that chipmakers have taken a beating, go ahead and look for chipmaker index funds. Exchange-traded funds can be helpful here as well, one could look at airline companies and try to buy the sack rather than buy a needle within the sack.
At the end of the day, we have to be up to date on whats going on in the market and hope to get bargains in times like these.
