The COVID-19 crisis has thrown the global financial markets into chaos. Investors throughout the United States have had their investing portfolios reduced by 25% to 35% only weeks after the market reached all-time highs. One of the most striking financial aspects of this corona virus-inspired economic dip is how quickly it all happened. This massive drop in stock prices occurred in a matter of days, making even the most long-time investors feel helpless in the face of COVID-19.
To be precise, the S&P 500 lost 20% of its value when COVID-19 started to spread through the United States. Instead of focusing on the doom-and-gloom of a long-term economic recession, some financial experts argue that the market downturn offers a massive opportunity for investors wanting to boost their portfolios. In this article, we’ll talk about the best methods for investing in a down market.
Reminding Yourself of Past Financial Downturns
One of the best things to do when investing during this COVID-19 downturn is to remind yourself of past recessions. While the news media is making it seem like the world is about to end, coronavirus will eventually subside, and some sense of normalcy will return.
When normalcy returns, the markets will rise as stability returns. During the 2008 financial crisis, stock values plummeted to all-time lows. When the economy stabilized, the financial markets eventually reached all-time highs. Economic experts believe that the markets will ultimately grow again when the coronavirus pandemic passes.
Building Diversification Into Your Portfolio
One of the best investment methods to employ during this financial downturn is to diversify your portfolio. Some financial experts suggest that investing money in precious metals like gold or silver is an excellent hedge against a turbulent stock market. Investing in real estate is another superb method for overcoming a market downturn while still adding value to your portfolio.
Continue Investing in Stocks
Although it takes some nerve and confidence, one of the best ways to invest during this COVID-19 financial dip is to continue investing in stocks. The reason for this is that even during this current economic downturn, there are still sectors in the American economy that are in good shape.
For example, industries like healthcare, e-commerce, and technology are growing in value as the COVID-19 situation stretches on. One of the best investing methods to employ in this downturn is to focus on industries that will continue growing despite economic troubles elsewhere.
Disclaimer: This article is meant strictly for informational purposes. Not intended as financial or investment advice. Do not misuse or misconstrue the information in this article. Seek advice from your personal financial advisor on matters pertaining to investments/finances.