Investing In Times of Crisis: What You Need to Know

You may already be getting the hang of investing. But doing it wisely during crisis is more important. Let us teach you how.

We are living in uncertain times right now. Taking your money out of your investments and putting it in a piggy bank until things settle down sure is a tempting idea. The question is, will things settle down? Is now a good time to even think about investing?

The answer is yes and no.

If you’re nervous about investing in the stock market now, then don’t do it. Fear is the enemy when managing investments during a market downturn, especially one caused by a global pandemic. But keep reading and learning until you’re comfortable with the idea. Or consider easing into it. If you might have started with a P6,000 investment, you might invest P2,000 now, another P2,000 in a few months, and the final P2,000 some months later. The worst thing you can do now is to panic and suddenly sell out of steady and generally growing companies.

On the other hand, dips in the market mean a huge sale on stocks in the future. Whenever a market drop happens, you need to be ready to buy. If you’re currently invested in the market, it’s a good idea to sell before prices drop so you can have liquid cash for when your desired company’s stocks and bonds go on sale.

One thing to consider before potentially investing in companies is ensuring it won’t be affected in a terminal way. Study the effects this current crisis has brought to the market. Some companies are actually seeing an abundance of business, such as businesses that sell food, medical equipment, and cleaning supplies. While other companies are experiencing deep ongoing losses that, in worst-case scenarios, will be terminal.

Make a watch list of your chosen companies, and wait for the right time to buy. It’s like going to a shoe store and the pair you’ve been wanting forever dropped their prices to 20%. You would be thrilled! Similarly, a great company’s stocks you want to own may have been priced higher than what you were willing to pay for it before, but now may be priced at 20, 30, or even 40% below its market value.

Essentially, what we want to leave you with is this… be cautious and buy when the time is right. The market always recovers as it has done historically before.

We made a list of recession-proof stocks to invest in during this crisis. Read more here.