As the world continues to reel from the impact of COVID-19, many of us are worried about what the pandemic means for us financially. As well as keeping a closer eye on our incomings and outgoings, we also need to consider how to manage our investments during the crisis.
The markets have seen plenty of tough times; in 2002, the tech bubble burst, in 2008 credit dried up and, in 2012, we had the sovereign debt crisis. So, what’s the best approach? Do we invest early and face temporary losses, or do we move too late and miss an opportunity?
If history tells us one thing it’s that we shouldn’t worry too much about trying to time the market. Historically, bear markets tend to be short-lived. Markets do ultimately recover fuelled by growth and technological innovation which underpin progress and corporate profitability. With that in mind, there are several investing approaches, which may be useful in managing your investment allocation.
See the infographic below for investment strategies to consider:
As well as having an investment strategy that makes sense, keeping sight of your personal goals and managing your emotions are vital when the markets are in crisis.
As well as having an investment strategy that makes sense, keeping sight of your personal goals and managing your emotions are vital when the markets are in crisis. According to economist Benjamin Graham, mentor of the famed investor Warren Buffet, “we are often our own biggest enemy when it comes to investing.”
This is certainly very apt today given potential emotional, physical and mental stress during this Covid-19 pandemic. Look to history and remember that bear markets tend to be short-lived and provide an opportunity to gain exposure to attractive long-term investment themes and asset markets at potentially lower, more attractive prices.
This article has been provided for general information purposes only, it does not take into account the specific investment objectives or financial situation of any particular person or class of persons and it has not been prepared as investment advice for any such person(s). Further details can be found at the disclaimers here.
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