The COVID-19 is rapidly changing daily life, social relationships, economic prospects, and health conditions. Moreover, the coronavirus outbreak spooked many investors and led to a downturn in financial, business, stock market, and other activities. Not only this, but it looks like stock markets are set for another volatile week ahead.
Here’s what happened between February 19 and March 12, 2020. At the Wall Street Stock Exchange, the S&P 500 index lost 25%. Moreover, in London, the FTSE 100 index lost 28%. Further, in Milan, the FTSE MIB index lost 40%. In other words, stock markets posted their most significant losses since the 2008 financial crisis. Also, this was the end of the 11-year bull market run.
In short, the downturn market sparked anxiety amongst both experienced and new investors. However, despite the spooky market dip, investors should remember that it is not the first time the market has experienced something like this. Probably, it won’t be the last either.
Luckily, now would be the perfect time for investors to get your investment strategy in check. So, how can you keep your money safe as markets panic over coronavirus? Let’s find out.
How to Keep Your Money Safe?
Nowadays, investors know that market volatility is an event they should be prepared for. However, investing in uncertain times can be difficult for some people, especially with the mistrust towards banks and other financial institutions.
Typically, individuals seek alternative ways in such difficult times. To be honest, experts call the current coronavirus situation a once-in-a-century pandemic. So, the real question is: Where can one park their capital to keep it safe in uncertain times?
Let’s take a look at the best three money-making opportunities.
In 1933 the Federal Deposit Insurance Corporation FDIC was created. Since then, the FDIC states that “no depositor has ever lost a penny of insured deposits.” The FDIC insurance covers $250,000 per bank account and applies to both the initial principal and any interest earned.
The U.S. Federal Bonds qualify as risk-free security. In uncertain times like this, the U.S. Treasury and Federal Reserve still issue securities in return for money. However, as many individuals already know this, bond rates would probably be meager. For instance, in January 2019, the yield from a 10-Year Treasury Note was around 2.730%, which is close to a record low.
The Stock Market
According to one of the best investors of all time, Warren Buffet, individuals should be greedy when others are fearful. Currently, many stocks have already lost more than half of their value. And keeping in mind that the coronavirus could lead to a recession and hammer the economy over the next few months, many investors are ready for potential bargains. Also, Warren Buffet believes that the stock market has survived in similar situations like for example, the 1919 Spanish Flu epidemic.
If you have decided to invest in the stock market during this market crash, then make sure you take a look at this article.
Rules For Investing As Markets Panic Over Coronavirus
If you have set money aside, now would be an excellent time to consider where you can invest that amount. By investing in the financial market, and more specifically, in the right place, you can double your money when the crisis is over, and life returns to its normal rhythm.
Moreover, if you ask professional investors who have years of experience what you should do in such uncertain times, then they will tell you a few basic rules you need to follow, especially when it comes to investing and they are:
First, do not invest money you intend to use in the next five to ten years.
Second, invest if you intend to hold the investment for the same period of time – from five to ten years. In other words, invest for the long term.
Third, buy stocks that are likely to withstand this kind of market crisis.
Furthermore, typically, Warren Buffet invests in reliably profitable companies with strong balance sheets and sustainable competitive advantages. Also, he calls them economic moats. So, if you want to keep your money safe, you should consider following the advice of the greatest investors of all time. Of course, don’t follow their advice blindly. The goal is to choose an investment that will deliver predictable returns.
Our favorite holding period is forever. – Warren Buffet