1). Don’t Panic
Avoid making rash decisions based on projected market trends, such as selling your investment when markets and on a downward trajectory. You risk making significant losses, especially if you fail to consider when you purchased the investment. You also could miss out on the potentially profitable recovery.
The coronavirus pandemic has amplified the volatility in the markets; hence, it is best to set and focus on long-term objectives, weathering market volatility, while making decisive moves to help you navigate.
2). Diversify And Spread Risk
Prudent investors appreciate the need for diversification. They spread their interest across global markets and hold a mix of shares, cash, and fixed interest. It is a safety net cushioning them against downturns in any given investment.
Be confident about your risk profile because it defines what you can stomach when a few investments start losing value while in your pursuit of higher returns.
3). Strive For Low Costs
Investment platforms are profit-oriented when working with you to help you make money. They charge a fee for holding funds and trading costs for shares. Therefore, ensure you are not paying over your investment’s odds.
Platform costs vary, and switching to one with the best value for your investment can see you save money. We recommend Fidelity and Nutmeg are top contenders if you are searching for a low-cost platform.
4). Drip-Feed Money Into Investments
The times are very difficult in the global markets, and selling or buying investments is a strategic game. It would be best if you fought the right moment to dip in your money, anticipating prices to go down or up depending on your investment objectives.
But the increased volatility has many investors jittery. So, adopt a saving culture. Set up an account to keep the extra cash for the unexpected such as when the opportunity to buy more units in investment because the prices are low.
5). Sensible Investment Choices
Search for firms with solid balance sheets and sound business models if you are investing directly in shares. They should be companies with a high demand for their services or products despite the economic turmoil. Supermarkets are an excellent example because they provide consumer staples.
In short, focus on investing in sectors, such as international health insurance, with a higher chance of prospering irrespective of the market climate.
6). Maximize On Cheap Stocks
Investment stock prices will be in a depressed status amid a gloomy economic outlook. But that means the prices will be low, and this will be a prime chance to buy stocks at a bargain.
Fund managers and seasoned investors search for undervalued businesses which a promising future. Such companies include those in sectors that have been hit by the coronavirus pandemic but are still standing on their feet.
7). Patience When Waiting For Dividends
Shares are an income stream that is not what it used to be, but there is still hope. Companies might have halted or reduced payments, but dividends are not a thing of the past. They are likely to return in the future.
Therefore, you should consider dividend stocks when searching for companies with a heft bank balance and no debt.
8). Consider Safety Nets
Many investors opt to hold more money in corporate bonds to get interest payments for lending money to businesses, which is more of a strategy to cushion themselves against volatile stock markets.
Gold can be a viable option for reliable value storage during market turmoil since its performance is not linked to stock markets. Precious metals and bonds can help in portfolio diversification, ensuring an investor is not wholly dependent on S&P 500 or FTSE 100 performance.
9). Invest In A Ready-Made Portfolio
Supermarkets can be an opportunity to acquire ready-made portfolios offering different investments like bonds, property, and other non-stock market assets. You can pick what you find interesting depending on your risk tolerance. However, it is best to ensure you are confident in the category because there is no definitive difference between a “cautious” or “balanced” portfolio.
Nutmeg takes our top rating if you are searching for a prime investment with a ready-made portfolio. But you can also go for something that promises built-in diversification by going for a one-stop-shop multi-asset fund with a dedicated fund manager.
10). Find Comfort From The Past
Difficult times are not forever, and they are a passing phase; therefore, keep your eyes on what awaits you. You can achieve this by setting a five-year investment horizon that ensures you can benefit as the market recovers.
A Barclays Equity Gilt Study found that cash deposits have offered lower returns than shares in more than 76% of the five-year periods since 1899. We are confident that Vanguard will be the best choice if you are interested in self-invested stocks and shares ISAs.
