When the pandemic hit, not only did it cause a global health crisis, but it also prompted a major economic fallout. People started losing their jobs while companies struggled to keep their businesses afloat. Because of this, many individual’s finances and investments were at risk. But despite the unpredictability of investing during COVID, it has taught us a few lessons that can help with future investments.
1. Buy and Hold Works
Because of COVID-19, the effectiveness of this passive investment strategy became more apparent. Buy and hold involves buying stocks and holding onto them for as long as possible despite fluctuations in the market. By committing to ownership and riding out market changes, you can expect to achieve higher gains in the future.
2. Technology Holds the Key
It’s important to know what to invest in during the coronavirus. With technology increasingly becoming vital in our everyday life, it might be wise to add tech to your economic portfolio. You can test the waters first by investing in index or exchange-traded funds (ETF) that can track the global performance of particular sectors like tech.
3. Invest in an Emergency Fund
In investing, it’s essential to be prepared. With the sudden rise and cost of expenses during the pandemic, it proved just how important it is to have an emergency fund. According to a survey by Forbes Advisor in May 2020, at least 14% of Americans continued to focus on their savings even as trading volume increased.
4. The Best Time To Invest Is the Present
The first step to seeing positive returns is putting money in the market. If you’re eager to wait for the right moment to invest, then you might miss out on gains you would have had if you started investing right away. One proof of this is the doubling of investment from March 2021 to March 2022, which occurred in the middle of a global pandemic.
Seek Help From a Reliable Financial Advisor
Managing your finances is not always easy, especially when you’re investing during COVID. If you want to make sure that you are making the right financial decisions no matter the situation, it’s best to seek help from a professional. Reach out to a trusted financial advisor at Lamkin Wealth Management to learn more.