Now that COVID-19 AKA coronavirus has become a full fledged worldwide panic, investors are feeling the hurt as markets have reached their lowest prices in years - bringing up speculation of a prolonged slump and even a long term depression. That's some pretty scary news if you have money tied up in the market like we do. That's why we took a look at three investment strategies and weighed our options before deciding on what we would do.
*** we are not professional financial reps or advisors, so do what you will at your own risk ***
Option 1: Pull Out Completely
We don't blame you if you freak out and pull every penny you can out of the market. First things first, people got families to feed, supplies to buy, and with millions losing their jobs - getting a little liquidity makes sense in the upcoming months. What really sucks is that you have probably lost half your portfolios value. If you need to cut your losses and free up the cash then do it now - some have speculated on another drop before things really reach the bottom.
Option 2: Stand Pat
If you are not the risk adverse type, then you know that the market comes in waves. Obviously, we are on the downside now but things will come back right? If you don't have any pressing cash needs, meaning that your family is taken care of, or you were fortunate enough to have a rainy day fund on top of your investments, then it doesn't make sense to pull out now and take the loss.
Stand your ground, and don't overthink it. Just keep in mind it's going to be a long and bumpy road to recovery but once we're full steam ahead again things will normalize and your losses will be relatively minor. Now would be a good time to evaluate exist strategies on any holdings you have, or to notify your financial planner that you are in it for the long haul but would like to talk to them about reorganizing your exposures. .
Option 3: Buy The Dip
If you were to boil stock trading down into one simple statement or goal it would be "buy low, sell high" and there is no better time to buy the dip then now. Every single business has been impacted by COVID causing even the surest of chips to fall. That means if you can spare a little cash you just might reap the rewards later when the train is rolling again.
If your living in your parents basement it might not be a smartest move to put all your eggs in the stock market basket, but then again maybe it is. After all, times like now are when $$$ millions are made and lost. We don't have that kind of money to play with but we like our odds better in the market than we do at the casino, so we put together a few hundred to buy in on a few stocks and we are ready to see what happens.
What's more American than believing in America? We like our countries chances of pulling out of the slump and are willing to put a little skin in the game. If you decide to do the same, just be sure to do your research and make sure that you have essentials first. Gambling away money right now would be stupid.
If you decide to BUY THE DIP, be sure to check back with us later and tell us how you did.