Hvordan investerer man i en post-COVID-19 verden? Det er hvad alle spørger om. Pandemien overraskede os alle. Mange virksomheder er lukket, nogle venter på, at restriktionerne bliver ophævet, mens andre allerede er gået konkurs.
Økonomien gennemgår en krise, og tingene ændrer sig. Industrier, der var velstående før pandemien, som turisme (hoteller, flyselskaber, krydstogtskibe), planlægning af begivenheder og andre ikke-essentielle virksomheder som skønhedssaloner, er blevet meget hårdt ramt, og der er ingen, der siger, om de vil klare at komme tilbage deres fødder efter pandemien vil være væk.
Selv fysiske butikker og erhvervsejendomme har lidt, for nu handler langt de fleste mennesker online. Virksomheder, der før lejede kontorlokaler, har nu givet deres ansatte mulighed for at arbejde på afstand hjemmefra.
Vi ved ikke, om og hvor mange af disse ændringer, der vil være midlertidige, og hvilke der vil være permanente. Med så mange usikkerheder er det ekstremt svært, næsten umuligt at forudsige, hvordan markedet vil udvikle sig.
Tjek vores Dr Wealth-app nedenfor:
Det er derfor, vi hyrede Minuca Elena til at nå ud til 45 finansielle eksperter og spørge dem:
Fortsæt med at læse for at se, hvad de havde at sige.
Den bedste måde at investere i en post-COVID-19 verden er at købe billige indeksfonde eller ETF'er (børshandlede fonde), hvor du kan købe mange virksomheder i en fond. Dette vil hjælpe med at give diversificering i din investeringsportefølje.
Ved passivt at investere i aktiemarkedet kan du generere kursgevinster og udbytte på lang sigt. Hvis du er bekymret for timing af markedet, så kan du prøve dollar-omkostningsgennemsnit, hvor du spreder din investering ud over en periode og køber ind i markedets højder og nedture.
Dette hjælper med at reducere din risiko, og du behøver ikke bekymre dig om at finde det bedste tidspunkt at købe aktier på.
Personlig investering har ikke ændret sig radikalt siden COVID-19. Folk bør stadig fokusere på områder, som de kan kontrollere, såsom hvor meget de bruger, hvornår de går på pension, hvordan de tager deres sociale sikring og planlægning af deres skatter til deres fordel. Dine personlige beslutninger har langt mere indflydelse på din økonomiske succes end op- og nedture på aktiemarkedet.
Når det kommer til dine investeringsbeslutninger, kan du kontrollere, hvor meget risiko du tager, og hvordan du reagerer på aktiemarkedet, men du kan ikke kontrollere dit afkast. Når du starter med det rigtige risikoniveau og har en god buffer af penge i banken, er der større sandsynlighed for, at du gør det eneste, der nogensinde har vist sig at slå aktiemarkedet:rebalancere!
Vores investorer var ved at rebalancere ud af aktiemarkedet i vinteren 2019/20 og rebalancerede tilbage til markedet i slutningen af marts 2020 tæt på COVID-19 aktiemarkedets lavpunkter. Nu, hvor markedet har nået alle tiders højder igen i slutningen af august, rebalancerede vi kunderne tilbage fra aktiemarkedet – ikke for at time markedet eller forudsige det vil falde, men for at sikre, at de holdt deres rette risikoniveau.
Når Federal Reserve sænker renten nær nul, betaler obligationer kun lidt afkast. Så investorer kigger andre steder hen, hober sig ind på aktiemarkedet og driver aktiekurserne op for eksempel – en del af grunden til, at aktiekurserne så langt ser ud til at være adskilt fra økonomien som helhed.
Investorer har også kigget på fast ejendom. Boligpriserne er steget med 5,5 % fra juli 2019 til juli 2020, de seneste data tilgængelige fra CoreLogic. Men det landsdækkende gennemsnit fortæller kun halvdelen af historien. Ejendomsværdier i mindre byer, forstæder og landdistrikter er steget år-til-år, mens ejendomsværdierne i de dyreste byer (såsom New York og San Francisco) er faldet.
Med aktier og fast ejendom prissat så højt, har vi lagt flere af vores penge på to områder:indkomstproducerende ejendomme og kortsigtede købs-rehabiliteringslån til investorer. Vi investerer i førstnævnte, fordi afkastet er forudsigeligt, baseret på markedsleje og priser. Du kan bogstaveligt talt køre pengestrømstallene i løbet af få sekunder ved hjælp af en lejeindtægtsberegner.
Vi investerer i sidstnævnte, fordi de fortsat kan håndhæves, i modsætning til boligejerpantelån. Långivere kan stadig afskærme ejendomsinvestorer under pandemien. Og med ejendomspriserne stigende og belåningsgraden nede, forbliver disse lån sikrere end de fleste, selv om afkastet er højere end de fleste.
Jeg har altid været en køb og behold investor ved at bruge bredt diversificerede lavprisindeksfonde. Jeg tror på at foretage investeringer med jævne mellemrum for at fange fordelene ved dollar-omkostningsgennemsnit. Vægtningen af forskellige aktivklasser bør altid være styret af investorens beholdningsperiode (mere konservativ, når du bliver ældre).
I en post COVID-verden tror jeg stadig på den samme grundlæggende filosofi. Jeg synes dog også, det giver mening at være meget opmærksom på tegn på en sort svanebegivenhed som pandemien.
Normalt går jeg ikke ind for kortsigtet handel, men når du ser tegn på noget meget negativt, giver det mening at overveje at foretage et midlertidigt skift til en meget sikker aktivklasse som kortsigtede skatte.
Et af de bedste steder at investere på det nuværende marked er fast ejendom - især i områder, der har været stærkt påvirket af pandemien.
"Trygge områder" oplever et boom i ejendomssalg, da folk søger at bo i områder, der har været mindre påvirket af virussen, da ejendomsmarkedet i disse områder hurtigt er blevet et sælgers marked.
Imidlertid vil de områder, der er blevet mest påvirket af virussen, se ejendomsværdier, der favoriserer køberen. I mange tilfælde er/var disse områder dem, der var i høj efterspørgsel før pandemien og vil sandsynligvis være i høj efterspørgsel igen, når pandemien er forbi.
Efter Covid er den bedste måde at investere på ved at beregne et gennemsnit af dollaromkostninger. Denne strategi giver dig mulighed for at automatisere din investeringsoplevelse. Ved at investere et afsat beløb hver måned på din investeringskonto undgår du at "timme" markedet, hvilket er næsten umuligt. Ingen kan med 100 % sikkerhed forudsige, om markedet vil stige eller falde, så hvorfor prøve det?
Med dollaromkostningsgennemsnit undgår du op- og nedture, men alligevel kapitaliserer du på at investere i et nedadgående marked og investerer kun en lille smule, når markedet er tæt på alle tiders højder. Overarbejde, dollaromkostningsgennemsnit giver dig mulighed for at komme ud foran. Du kommer til at kapitalisere, når markedet er tæt på dets lavpunkter, fordi du stadig investerer. Uanset de aktuelle markedsmiljøer holder DCA dig investeret.
Desuden bruges denne strategi af legenden selv, Warren Buffett. Så hvis du vil investere som oraklet i Omaha, så start med et gennemsnit af dollaromkostninger. Det er nemt at anvende, kraftfuldt og praktisk - giver dig ro i sindet. Den bedste måde at få mest muligt ud af denne strategi er at investere i to-tre lavprisindeksfonde. Dette holder dig diversificeret og investerer i specifikke indekser, der stemmer overens med dine økonomiske mål og risikotolerance.
De siger, at en recession er "når din nabo mister deres job, og en depression er, når du også mister dit".
Selvom jeg ikke tror på, at den australske økonomi er i depression, har mange allerede mistet deres job. og et økonomisk tømmermænd er næsten en sikkerhed.
Her er mine følgende tips til at overleve recessionen.
De aktuelle begivenheder er uden for vores kontrol. Selvom vi ikke kan gøre noget ved dette, er det vigtigt at fokusere på, hvad vi kan gøre og holde os beskæftiget med de områder af livet, som vi kan kontrollere, f.eks. sundhed, relationer, uddannelse og åndelig vækst.
Se dette som en mulighed for at forbedre og lave en forandring. Dette kan involvere en ændring i karriere, yderligere uddannelse, måske endda at starte en ny virksomhed efter at have set et nyt behov/forretning. Et godt eksempel er destillerier, der nu sælger håndsprit.
Gennemgå alt, hvad der koster dig penge, med henblik på at spare på dine udgifter. Dette inkluderer telefonabonnementer, kreditkort, el-udbydere, husleje og/eller boliglånsudgifter.
Med de besparelser du har opnået (se tip 3) behold disse på en konto, der kan bygges op, og du kan bruge til nødstilfælde (3-6 måneder af dine udgifter er ideel at have sparet op). Hvis du allerede har en nødfond, så anvend disse besparelser til at nedbetale eventuelle lån eller brug den til at opbygge dine investeringer.
Få hjælp. Der er gratis finansiel rådgivertjenester, som du også kan få adgang til.
Hvis du er en nyere investor, og du ønsker at investere efter COVID, er den sikreste måde at hacke huset på. Du kan købe et hus med kælder eller duplex og leje denne ekstra plads ud. House hacking giver dig mulighed for at betale dit realkreditlån med lejeindtægten, hvilket betyder, at du slipper for dine boligudgifter. At spare så mange penge hver måned vil give dig mulighed for at tage et slag økonomisk i tilfælde af en post-COVID recession og stadig være i stand til at holde sig oven vande.
Så, når recessionen går over, og du kommer dig økonomisk, kan du flytte ud af den ejendom og leje den ud. Med de penge, du har sparet ved ikke at betale et realkreditlån, burde du have nok til en udbetaling på dit næste hus. Pengestrømmen, som du modtager fra lejeboligen, hjælper dig med at betale for realkreditlånet i dit nye hjem til din familie.
I post-COVID 19 skal vi være endnu mere forsigtige med at gå ind i ejendom, hvor tallene stables op, og der er rigelige buffere på plads. Invester i områder, hvor overkommelighed er en primær faktor for at minimere risikoen og være i stand til at holde fast i ejendommen på lang sigt uanset markedsforholdene.
Vælg områder, hvor arbejdsløsheden ikke er ramt så hårdt, da markedet stadig vil være aktivt med efterspørgsel, og lejemarkedet i disse områder vil have lavere tomgang på grund af overkommelighed. Dette holder ejendomspriserne stabile og tomgangsprocenterne lavere, hvilket er hvad du ønsker som investor.
Se på regionale områder, hvor folk vænner sig til at arbejde hjemmefra, og behovet for at pendle til byen er faldende. Overkommelige priser er meget højere i regionale, især områder som Geelong, der har gjort det betydeligt, da den stadig får alle fordelene og tilskuddene ved at være regional, men er den næststørste by i Victoria.
Australien er ved at blive et mindre bycentreret land, og med fleksibiliteten ved at arbejde hjemmefra, gør de regionale områders overkommelige priser det mere ønskværdigt for overkommelige priser at få den ejendom, du leder efter, et hus i regionen kan koste lige så meget som en enhed i by.
Det er en god idé at følge en langsigtet strategi, uanset om vi taler før, efter eller under COVID 19.
På den måde behøver du ikke nødvendigvis ændre din strategi for meget, hvis du investerer på aktiemarkedet.
Historisk set har aktiemarkedet set et gennemsnitligt afkast på omkring 7-8 % om året justeret for inflation, selvom dette afkast er kommet med mange op- og nedture.
Når det er sagt, er det klogt at være opmærksom på de forbrugertrends, der er opstået under COVID 19 og muligvis fortsat forekommer efter COVID 19.
Nogle af de store tendenser er skift mod at arbejde hjemmefra og handle online. Teknologiske virksomheder, der tilbyder videokonferenceværktøjer, sociale netværk, streamingtjenester, online shopping og mere, har oplevet store stigninger.
Pandemien gav disse tendenser et stort skub, men de skete allerede før, hvilket tyder på, at de er kommet for at blive.
Det er også værd at bemærke, at nogle af de industrier, der er blevet hårdest ramt af pandemien, højst sandsynligt vil stige igen.
Jeg taler om turistindustrien, hvor flyselskaber, hoteller og eventvirksomheder vil blive efterspurgt igen, i en post-COVID 19-verden.
Den bedste strategi er at forblive løbende investeret. At forsøge at time markedet virker ikke, og selv en lille fejl i timingen kan få dig til at tjene mindre, end hvis du forblev løbende investeret.
Hvis du investerer i individuelle aktier (hvilket du ikke kan gøre i direkte solgte 529-planer), er det generelle råd at undgå at investere i rejser, spisning og underholdning. Det er sektorer, der ikke vil klare sig godt, før pandemien er et fjernt minde. Ellers er investering i bredt baserede marketingindekser en god langsigtet strategi..
Samlet set vil der være øget volatilitet, så du vil stå over for øget risiko, ikke kun øget afkast. I dag er et godt eksempel på de store udsving, man kan forvente. Hvis din risikotolerance ikke kan klare halsbranden, så invester i noget sikkert, der ikke har nogen risiko for tab for hovedstolen.
Som altid er minimering af omkostninger nøglen til at maksimere nettoafkastet.
Når folk spørger mig om råd til at investere i en post-coronavirus verden, er mit svar altid det samme:fortsæt med at gøre præcis, hvad du gjorde før pandemien.
De af os, der investerer til pension, spiller det lange spil, og det er uundgåeligt i løbet af årtiers engagement i denne investeringsstrategi, at der vil være både op- og nedture. Det er bestemt et markant lavpunkt lige nu, men selvom vi måske ikke ved, hvornår det slutter, har historien vist, at vi vil komme ud på den anden side, og markedet vil stabilisere sig til sidst.
Det faktum, at denne tendens sandsynligvis vil gentage sig selv flere gange i løbet af dit investeringsliv (selv om det forhåbentlig ikke er forbundet med en pandemi!) betyder, at du skal være fortrolig med disse op- og nedture. Hvis du ikke er det, som hvis du er overvejer at ændre, hvordan du investerer efter COVID-19, er det tid til at tage et ekstra kig på din risikovillighed og justere din investeringsstrategi i overensstemmelse hermed.
Derudover er det blevet fastslået, at de, der fortsætter med at investere regelmæssigt, uanset hvordan markedet klarer sig, vil ende med de stærkeste porteføljer, når de går på pension. Dette viser, at den bedste måde at investere både i den nuværende situation, som vi alle befinder os i, såvel som i en post-COVID-19-verden, er nøjagtig den samme:Bliv ved med at gøre det, du laver, og sæt dig til rette i det lange løb.
Det lyder måske ikke så glamourøst som de ekspertinvesteringsteknikker, der anvendes af Wall Street-supremos, men blot at investere din tid i at få bedre tilbud på dine største husstandsregninger, såsom dit realkreditlån, kan gøre en stor forskel.
Selvom der er penge at tjene og tabe på aktiemarkedet, vil du blive overrasket over, hvor mange penge du kan tjene til dig selv ved blot at sænke renten på dit boliglån. Selv et halvt procentpoint af din rente kan generere titusindvis i besparelser i løbet af lånets løbetid. Det er meget færre penge for långiveren, og flere penge for dig at bruge eller investere med.
I vanskelige økonomiske tider er troværdige låntagere meget værdifulde for långivere, så hvis du har en god kredithistorik og masser af egenkapital i dit hjem, kan du være i en god position til at forhandle med dem om en lavere rente.
Ligeledes kan du spare tusindvis om året på din forsikring, telefonplan, internetplan og forsyningsselskaber. Markedet for disse produkter bevæger sig ret hurtigt. Hvis du ikke stopper for at se dig omkring en gang i mellem, kan du gå glip af nogle gode tilbud.
Når vi tænker på at investere i en post-COVID 19-verden, er der en delt strategi og en dels taktik, der skal tages højde for. Når det kommer til strategisk planlægning, bør du overveje at investere:
Invester med langsigtet for øje
Hav en spilleplan eller ideelt set en økonomisk plan, der ser på dine fremtidige mål. Nogle gange, når vi fokuserer for meget på det instrument, vi bruger, ender vi med at være langt væk fra vores mål.
Glem ikke kontanter på sidelinjen
Alle har brug for en nødfond, men nu er det et godt tidspunkt at gøre nødfonden lidt større. Det, der gør, er først, det giver ro i sindet, at uanset hvad der sker med dine investeringer, er din dag til dag den samme økonomisk. For det andet giver det dig "tørt pulver", som vi siger i branchen, så når en investeringsmulighed opstår, kan du drage fordel af denne mulighed.
Skatter vil altid være vigtige
Folk tror, at det at komme ind på markedet er den bedste måde at drage fordel af nedgangstider, men der er også mulighed for at flytte rundt på tingene på en skatteeffektiv måde. Hvis du har ikke-pensioneringskonti, kan du potentielt få et fradrag på 3.000 USD om året, eller hvis du har konti før skat, kan en Roth-konvertering spare dig meget i skat i fremtiden.
Mens COVID 19 har bragt en masse forandringer og volatilitet til markedet, er de grundlæggende principper for finansiel planlægning stadig tilbage.
Fordi jeg mener, at bæredygtige investeringer er mere modstandsdygtige end ikke-bæredygtige investeringer, og dataene understøtter det, vil mit råd til enhver, der ønsker at anvende kapital på en meningsfuld måde, være at tilpasse deres personlige interesser og moral med den type investeringer, de foretager.
Hvad dette betyder i praksis, er at lave due diligence og researche i etos og virksomhedsadfærd for de virksomheder og produkter, som de selv bruger.
Vi kan alle forudsige og antage, at store teknologiaktier vil fortsætte med at stige med en hyper-oppustet hastighed, som de har, men når du leder efter langsigtede investeringer, ser du på virkelig bæredygtige og effektorienterede muligheder som impact ETF eller E.S.G. indekser er en fantastisk måde at lave en bred indsats på bæredygtige fonde og virksomheder.
Denne pandemi viste os, at fjernarbejde hjemmefra er levedygtigt og i mange tilfælde den foretrukne måde at arbejde på. Mit forslag til folk er at investere deres tid og kræfter i at få et fuldtidsjob, de kan udføre, mens de arbejder i udlandet. Jeg er en ivrig fortaler for at bruge Geographic Arbitrage til at øge besparelser og investeringer.
Et af de første trin, som Financial Planners anbefaler i enhver økonomisk situation, er at reducere dine månedlige leveomkostninger. En klar, men ekstremt effektiv måde at reducere dine omkostninger markant på er at flytte til et billigere land. Du kan skære dine månedlige udgifter ned med op til 70 %, blot ved at hoppe på et fly.
At reducere dine leveomkostninger i udlandet, mens du arbejder på en amerikansk løn, kan spare dig $20.000-$30.000 om året. Det er penge investeret i aktiemarkedet eller brugt til at betale dine studieregninger.
For eksempel har jeg boet i 10 lande, mens jeg har besøgt 40 lande over fem år. Jeg rejser konstant for at spare penge. Som et eksempel er den gennemsnitlige løn i USA $3.700 pr. måned. Siden januar har jeg nydt livet i Filippinerne og brugt omkring 1500 $ om måneden.
En person, der arbejder på et fjernjob i Filippinerne, kan investere $2.200 ekstra om måneden. De lave leveomkostninger i Filippinerne inkluderer et fantastisk liv med et aktivt socialt liv, en dejlig lejlighed i en trendy del af byen, hyppige spisning ude og rengøring.
Vil du investere og spare mere? De barske måneder på aktiemarkedet i begyndelsen af pandemien overbeviste mig om, at vi ville stå i en længere økonomisk krise. Jeg undersøgte flere lande, hvor jeg kunne få et langtidsvisum, der havde lavere leveomkostninger end $1500 pr. måned.
Mit valg er Tyrkiet, hvor jeg vurderer, at mine månedlige leveomkostninger vil falde til $800-$1000 pr. måned. I sidste måned trodsede jeg en 20-timers international flyvning for at flytte til Antalya, Tyrkiet.
En af de bedste måder at investere i en post-COVID 19-verden er at opbygge en meget diversificeret portefølje, der er afdækket mod fremtidige markedschok. Aktiemarkedet har vist sig meget volatilt i 2020, og obligationsrenterne forbliver på historiske rekordlave niveauer.
Alternative investeringer giver en mekanisme til at allokere en del af en portefølje til materielle aktiver, der ikke er korreleret med aktier eller fast indkomst, hvilket kan producere både nuværende afkast og langsigtet værdistigning. Eksempler på ikke-korrelerede aktiver omfatter træarealer, ædle metaller, fast ejendom og landbrug.
Derudover viste COVID-19, at mange sektorer af økonomien er stærkt afhængige af skrøbelige forsyningskæder, herunder fødevaredistribution. Investering i virksomheder, der vil trives i tider med økonomisk usikkerhed, er afgørende for at holde et pensionsredeæg intakt under markedskorrektioner.
En række online platforme giver investorer adgang til private virksomheder, der arbejder på at bygge mere robust infrastruktur i sektorer som landbrugsvirksomhed og sundhedspleje, mens de forbliver isolerede fra den volatilitet, der er iboende i børsnoterede værdipapirer.
Nye investeringer i regenerativt landbrug samt lokalt og bæredygtigt landbrug vil være nødvendige for at flytte USAs produktion for at imødekomme forstyrrelser i forsyningskæden, samtidig med at maden holdes sikker og økonomisk overkommelig for alle.
Det har ikke været let at investere i nutidens markeds- og økonomiske klima! På den ene side ønsker du ikke at bekæmpe FED og den lempelse af pengepolitikken, der i øjeblikket er på plads.
På den anden side udskriver FED billioner, og værdien af dollaren vil helt sikkert falde i den nærmeste til mellemlange fremtid. Vi er også i øjeblikket i en recession, og den "virkelige" økonomi viser kun lidt eller intet et opsving.
Ligeledes ser aktiemarkedet ud til at være euforisk, andre aktivklasser virker ekstremt højt værdsatte og realrenterne er negative. Med så mange forskellige variabler at huske på, hvad gør du så som investor?
Diversificer og vurder mulighedsomkostningerne for dine penge. Da inflation er en hovedbekymring for alle i den nærmeste fremtid, ønsker du ikke at have kontanter, men du ønsker heller ikke kun at være i højrisiko og højt værdsatte aktiver som aktier.
Mine anbefalinger:Invester i fast ejendom med en god cap rate, der betaler sig selv og vokser på lang sigt. Efterlad ikke penge på højafkast-opsparingskonti, da du ikke engang slår det forventede inflationsbenchmark ved at gøre det.
Hold vinderne på aktiemarkedet, men vær ikke bange for at tage nogle kontanter og diversificere med andre aktiver, hvad enten det er kryptovalutaer, værdi- og udbytteaktier (som ikke vil blive alvorligt påvirket af økonomisk usikkerhed), obligationer osv.
Dette kan virke lidt kedeligt, men jeg tror, at den bedste måde at investere i en post-COVID-verden på er den samme som den bedste måde at investere i en pre-COVID-verden - bredt baserede, billige passive indeksfonde.
Det meste af forskningen viser, at ikke engang de bedste investeringsrådgivere kan forudsige fremtiden på lang sigt på en måde, der giver dem mulighed for konsekvent at slå markedet med nok margin til også at dække omkostningerne ved deres tjenester.
Jeg mener personligt, at kunder bør tjene deres penge og fokusere deres opmærksomhed på, hvad de gør som en primær indkomstkilde, og derefter lade deres rigdom vokse uden en masse ballade.
Der ser ud til at være flere spørgsmål end svar, når man ser ud på investeringslandskabet i en post-COVID 19-verden. For det første, her i USA, har vores Federal Reserve indikeret, at renten vil være utrolig lav (effektivt 0%) i op til de næste fem år.
Efter den store recession ansporede lavrentemiljøet tonsvis af investeringer og et særligt stærkt opsving i den hårdest ramte sektor af økonomien:fast ejendom.
Denne gang ser vi dog mere aktivitet i boligområdet specifikt for fast ejendom. De lave renter ser ud til at være mere en appel til byboerne, der fører en masseudvandring fra byerne til fordel for mere plads i forstæderne. Med hensyn til kommerciel fast ejendom, og i modsætning til i 2008-09, har multinationale virksomheder annonceret, at de vil udvide deres rækker af fjernarbejdere og reducere deres fysiske kontorlokaler.
COVID 19 har fremskyndet overtagelsen af teknologi (specifikt:fjernarbejde og fjernmøder) i en grad, som mange analytikere forudsagde var flere år ude i fremtiden. Hvordan dette vil oversætte og gennemsyre vores markeder, er stadig et meget omdiskuteret spørgsmål.
Taberne i vores nuværende forretnings- (og rente-) miljø:Kommerciel ejendom, energiselskaber, fastforrentede investorer
Vinderne:Nogens gæt.
Det er afgørende at præcist identificere de sektorer, der blomstrer for at være klar til astronomisk vækst efter COVID-19-pandemien. Dette kræver ikke en guddommelig profetisk evne; historiske data kan give dig et godt overblik over, hvad der ligger uden for coronavirus-horisonten i investeringsområdet.
Som sædvanlig er teknologinichen den mest robuste sektor at investere i under og efter pandemien. De to smukkeste industrier her er automatisering og e-handel.
Vi har set teknologiorienterede virksomheder som Tesla opleve en eksponentiel stigning i 2020. Det er ikke overraskende, at Teslas aktier er steget medeorisk op til 500 % alene for 2020. Zoom fester også som '99 med et overskud på 3.300 %, som rapporteret i Q2-resultatet!
Bortset fra disse industrier, er transporten klar til en dristig stigning, straks pandemien rydder op, fyre som Union Pacific, J.B. Hunt Transport Services er klar til en genopblussen.
Når du ser på de mest attraktive virksomheder til at investere i transportnichen, bør du se ud over den generiske klynge af logistikvirksomheder, luftfragtvirksomheder, flyselskaber og fokusere på detaljer som transportvirksomhedens brændstoføkonomi, gæld (i betragtning af deres enorme behov for anskaffelse af udstyr ), COVID-respons, og hvor godt de i øjeblikket klarer konkurrencen i deres niche.
Personligt foretrækker jeg transportvirksomheder, der hælder til automatisering.
Det meste af den seneste opgang på aktiemarkedet siden marts har været drevet lavt af teknologi og nogle lægemidler, der er involveret i vaccineindsatsen.
Spørgsmålet, jeg har, er, hvor flyder pengene hen, nu hvor alle har de tekniske opgraderinger, de har brug for, og muligvis endda skalere ned på dem, efterhånden som tingene begynder at normalisere sig.
3 af de 5 dårligst præsterende sektorer i år er forsyningsselskaber, forbrugsgoder og ikke-cykliske forbrugere. Jeg tror på, at alle disse 3 gode medvinde reducerer risikoen, hvis markedet falder, og vil være nogle af de stærkere sektorer, efterhånden som tingene begynder at normalisere sig.
Forsyningsindustrien er en meget stabil branche og giver ret gode udbytter. Efterhånden som den amerikanske centralbank fortsætter en nær 0-rentepolitik, vil obligationer og cd'er have en meget lav rente, hvilket presser pensionister og ældre investorer ind til pålidelige aktier med gode udbytter, og det er her, forsyningsselskaberne kommer ind i billedet. Misforstå mig ikke, det vil du ikke se en stigning, som du gjorde med teknologien her, men du vil få noget sikkerhed og stærke udbytter til at fylde din portefølje på.
Med forbrugernes skønsmæssige og ikke-cykliske, er min overbevisning, at folk vil begynde at købe ting, de havde holdt ud med siden tingene startede. Opsparingsraten for amerikanske borgere er den højeste, den har været i over 20 år, og de penge vil flyde igen, og jeg tror, at de primært vil være i forbrugernes skøn, og ikke-cykliske vil også se et bump fra mere forbrugerforbrug.
Dette er sandsynligvis et godt tidspunkt at se på at rebalancere din portefølje, hvis du havde nogle væsentlige positioner i teknologisektoren og begynde at flytte nogle af disse overskud til de hårdere ramte sektorer, der skulle beskytte dig og muligvis være den næste store sektor.
For enhver pris ville jeg undgå REITs. I samtaler med mange mennesker overvejer deres virksomheder at sælge deres kontorlokaler, parre sig på lejet plads og flytte til en mere fleksibel pladsopsætning, der dækker et meget mindre fodaftryk.
The best way to invest in a post-covid world is the same as how you would invest in a pre-covid world. Stay the course and don’t abandon your investment strategy. A portfolio that is well diversified and has proper risk exposure based on your tolerance is built to withstand good and bad markets.
Many investors become tempted to reduce their equity exposure and go to cash or bonds because of the perception of where the economy is headed and the impact it may have on their portfolio.
Luckily, history is on our side when it comes to the years that follow a recession. Of the 15 US recessions that have occurred over the past century, 73% of the time, returns on stocks were positive two years after a recession began.
Deciding to change your investment strategy shouldn’t be driven by trying to guess what the market might do, particularly during a recession. Succumbing to this strategy could potentially derail your long term financial goals.
By staying disciplined and revisiting your investment strategy periodically, rather than only during periods of high market volatility, you give yourself the opportunity to have a better investment experience.
The technology sector is on fire right now because more and more people are engaging in e-commerce as a way to order products and services while staying at home, so a juggernaut like Shopify might be a good investment, or Amazon, Google etc. That said, apart from choosing specific companies, I still recommend diversity no matter what kind of instrument or company people choose to invest in.
While emerging technology is always attractive in the companies behind work from home products and services like Zoom are taking off in terms of share price, it’s still important to balance out the overwhelming impact coronavirus is likely to have on the economy going forward. That means balancing your portfolio appropriately to account for hedging against the market and investing in things like precious metals or even digital currency if you believe in it.
As always, you still want to keep some of your money and blue-chip stocks like Walmart or index funds like the S&P 500, and if you have the money, perhaps a real estate investment might do you well. People always need somewhere to live regardless of the state of the economy.
As a last bit of advice. Keep in mind that the stock market and nearly every other form of investment has been skyrocketing since the coronavirus pandemic grabbed hold of the whole world in mid-March. As Warren Buffett says, ‘be fearful when the markets are greedy, and greedy when the markets are fearful’.
A post-Covid world is one of financial repression where central banks favor borrowers over savers by keeping short-term interest rates low and doing what they can to keep long-term interest rates low.
In that environment, cash flow yields and expected investment returns are low. Savers will have to save more. They will have to take more risk by keeping a higher allocation to stocks in order to benefit from earning growth.
Investors need to focus on total return, not just income. There remain some attractive income strategies such as preferred stocks and dividend-paying common stocks.
Although property investments have been fluctuating for many years due to various declines, the general trend suggested that capital injections into real estate were on the rise. We do not see any reasons why this trend should reverse. Property still generates good relative returns compared to other asset classes.
Let’s look at the most resilient vehicle for investing in real estate – REIT. These trusts acquire, build, and manage properties through pooled investments. Investors buy REIT stock and become co-owners of a property.
COVID-19 impacted the REIT segment. For instance, real estate investment trusts in the USA went down by 8.2% on average in mid-May due to lower rent collection in all sectors. In April, REITs collected only 71.4% of expected revenue from shopping centres and retail spaces.
Now that lockdown is being gradually lifted, the largest market players in the USA and UK are re-emerging (e.g. Simon Property, Segro Plc). Some REITs generate steady revenue even in a crisis and recover faster than others. During the pandemic, these are the trusts focusing on data centres, storage spaces, and healthcare facilities.
REITs are resilient to market fluctuations and interest rate changes, as their loan-to-value ratio is sustained at no more than 30–40%. Following the 2008–2009 recession, REITs have been reducing financial leverage and increasing owned capital. When the recession set in, REITs were using 60–70% of borrowed funds to finance their activities.
During the 2020 global crisis, REITs are outperforming shares.
In early June, REIT indices rose almost by 9%, whereas S&P 500 and Dow Jones Industrial went up by 8.3%. REIT indices are expected to trend steadily upward faster than others, as was the case during the 2008 financial crisis.
REITs can bring higher returns in a crisis because they are tied to the real estate cycle, which lasts about 18 years. Shares are impacted more by the ups and downs of the economy – underperforming during recessions while real estate investments generate steady returns.
A REIT is a very good independent piece of an investment portfolio after the crisis. For the last twelve years, REITs showed the least diminishing returns compared to other liquid financial instruments, as well as resilience to interest rate changes and inflation, fast successful recovery in the post-crisis periods, and steady dividend payouts.
Based on my own research and what I’ve been noticing with my existing investments, here is my opinion on the best way to invest.
I’m keeping a lot of my net worth in appreciating assets with little volatility such as real estate, gold / silver, and well established blue chip stocks or ETF’s. I’m also keeping at least 25% of my net worth in cash so I have a rainy day fund.
The key to this strategy is that I have enough cash on hand for immediate purchases and everyday life expenses. But, at the same time, enough invested in assets like stocks or real estate which will appreciate to protect myself from inflation.
The FED recently released more dollars into the money supply and has spoken about averaging a target for inflation at around 2% going forward.
No one can tell for sure how this will all play out. But, I’m sticking to a strategy I know worked through the last great recession of 2008 based on my own experience. I’m also avoiding tech stocks right now which are built upon too much hype and not the fundamentals.
I think index funds are a great way to invest money during the pandemic. We don’t know what the world will look like after the pandemic.
As things stand today, we have seen the travel industry get hit hard by the pandemic. No one wants to get on an airplane and business travelers aren’t filling hotels. Some people are speculating that business travelers will complete all of their meetings over Zoom in the future. Others think that business travel may bounce back sharply in a post-COVID world. Today both outcomes seem equally likely.
On the other hand, the pandemic has helped some companies soar to new heights. But it’s possible that they’ll fall back to earth once everyone has returned to their normal routines. Because we don’t know what the future will look like, index funds are a great way to grow your portfolio during the pandemic.
By investing in index funds, you are betting that after the pandemic the economy will grow. This seems like a safe bet. When things return to normal, people will spend money, there will be innovation, and the economy will grow. And as the economies grow and businesses profit, your index funds will grow too.
In a post-COVID 19 world, I would recommend continuing to diversify your investment portfolio to different stocks as well as over time. While I would usually recommend investing in dividend paying stocks, and reinvesting the returns.
Post-COVID 19 requires investors to be extra cautious when investing in stock with the aim of dividend cashflows. According to Janusn Henderson asset management group, 27% of companies have cut dividends, half of which suspended dividends all together as a result of COVID 19.
There are several industries that are currently thriving thanks to COVID 19, while other are suffering serious losses. I would avoid industries that are deemed to struggle in the coming months or even years due to the pandemic. These include tourism, brick and mortar, amongst others. Instead focus on industries that are likely to benefit from the impact of COVID 19, such as health tech and communications tech.
As always, keep the portfolio diversified and avoid putting all eggs in one basket. Relatively cheap financial instruments such as ETFs are useful to gain a broad diversification. If we go into a bear market, hold your positions. Use the opportunity to buy rather than sell.
My main takeaway from all of the effects COVID has had on the market is a re-emphasis on long-term investing. We’ve seen dramatic growth in the stock market over the last few months, which has been an almost polar opposite trend of the world sentiment. This just proves that no matter how skilled you are as an investor, no one can truly time the market.
In addition to that, the last few months have shown that markets and price movements can be counterintuitive to the traditional metrics many use to measure the health or attractiveness of a particular investment. Index funds and other passive investing options continue to prove to be attractive options in any conditions.
On the housing front, real estate has largely shown to be relatively resilient even through the pandemic. Although partially driven by historically low-interest rates, housing prices have largely remained flat. This is not necessarily reflective of every geographic area in the United States, but the initial fear of 2008-type effects happening were blown out of proportion in hindsight.
There could still be a situation where we just aren’t feeling the effects that COVID has had on the nation and the globe due to the recent expiration of many economic impact stimulus policies, but only time will tell.
Everyone keeps asking what the world will look like post-COVID 19 and while that is an important question, a question that is perhaps more important is how is the world the same? Investing really hasn’t changed much because the basic principles of investing are meant to handle situations as extreme as COVID-19.
Good investing has three major principles, those are:diversify and minimize risk, reduce fees, and invest for the long term.
1. Diversify and minimize risk are hugely important principles that everyone seems to forget whenever there is a major crash. The “don’t put all of your eggs in one basket” principle is good because you minimize the risk of losing all of your money. If you have invested broadly across multiple industries within and without the stock market the chances of your losing all of your money are basically zero.
If you do lose all of your money because there is a situation that is so bad losing all of your money will be the least of your concerns (for example, a meteorite hits the planets and a mass extinction occurs–sorry to be a downer, but that is the truth).
2. Reduce fees is another important principle because regardless of how well your investment is doing (on up years and down years) the fees still get taken out every month or year. Therefore, the higher your investment fees are (usually called an advisory fee or a management fee) the less money you will have in your account regardless which is bad for long term growth.
3. Invest for the long term is the last principle. If you are investing for the long term a major dip is NOT a time to be concerned but a time to stay calm. As the market goes down you have not technically lost money UNTIL you pull that money out of the market. Barring an end of the world situation, the market WILL come back. So just wait it out. Even better, invest in the bottom and ride it up to the top. Investing should not be looked at in the short term.
The people that lost their shirts in the COVID dip are the people that were heavily invested in one sector that lost considerably (not diversified), had a high-fee actively managed account (didn’t reduce fees), and pulled their money out of the market “before I lose any more money” which turned their loss on paper into actual loses that are all but impossible to recover from (didn’t invest for the long term).
So what does that lead to on a high level? Post-COVID 19 just keep investing in a diversified, low fee investment for the long term. I would recommend index funds, but mutual funds and REITs can also be good to mix into your investment. It just depends on your goals. But keep investing!
On an individual level though, many things may have changed. How did you react emotionally when your investments dropped dramatically? How did you feel as the stable growth of more than a decade was wiped out? If you were freaking out, then it might be a good idea to change your investment strategy after things calm down.
Try something with less risk like bonds, or keep more cash on hand in case of emergencies. Make sure that you are ready and comfortable just in case something else this widespread and catastrophic happens again. Even if it doesn’t it will help you sleep at night and will strengthen your overall investment position.
We’re big believers that pretty much any time is a good time to get into the market, as long as your intention is to stay invested long-term. And that the same advice applies today as it did yesterday and as it will tomorrow.
It’s more important to consider your own age and investing goals rather than the current state of affairs. No one can predict the future, so investment advice is all based on historic stock market performance.. The broad stock market has a long history of increasing in price and paying dividends over the long run. Whenever you wait to invest, you’re likely just consigning yourself to pay a higher price for those same shares later.
We started investing when we were in our early 20s, almost a decade ago now, so our portfolio tilts a little more toward high-risk, high-reward asset classes, like equities, instead of safer bets like bonds. We also have a longer time horizon until we draw down our portfolio, which allows us to weather the volatility of the stock market without selling.
A lot of new investors have a tendency to gravitate toward exotic strategies like options trading, forex trading, and cryptocurrency speculation. The lesson most experienced investors learn over time is that a simple, passive index fund investing strategy pays off better in the long run, and it takes less energy and thought to maintain as well.
Invest after you save at least 6-9 months’ worth of expenses.
Investors are desperate for yield and may be more risk-seeking, susceptible to high-cost schemes, “exclusive” strategies, and financial services salespeople ready to take advantage. Your best bet is a fiduciary advisor who is not paid on commissions or confusing fee structures.
Especially now, stick with low-cost index funds and etfs.
ESG standards remain unreliable and greenwashing is rampant; however, legitimate ESG funds have been doing extremely well and are a great option for investors post-covid.
Discount trading platforms, like robinhood.com, are popular these days. Many reasons for this, including the lack of sports betting due to COVID. There is also fear of missing out by seeing so many success stories on social media from those who have killed it buying stocks distressed by COVID. Day-trading is a get-rich-quick scheme, might as well go to Vegas. it’s the wrong way to invest and a losing strategy over the long-term.
Considering the political and economic uncertainty, the best bet post COVID is to rely on a globally diversified portfolio of low-cost index funds. If the US stock market struggles, owning stocks in the developed countries outside the US and the emerging markets allows capture of returns wherever they may occur next.
The best way to invest in a post-COVID 19 world is philanthropy. As Melinda Gates says, “Our humanity is the one thing that we all have in common,” philanthropy is the love of humankind.
As the US Trust Study on High Net Worth clients and Advisors indicate HNW clients would like advisors to bring up philanthropy discussions early and often in the relationship.
Benefits for the client include solving personal, financial, and legacy goals. This is It the comprehensive plan includes a client’s personal, financial, and legacy objectives.
According to Micheal Norton, associate business professor at Harvard, “Money can buy you happiness if you stop spending it on yourself and spend it on others. "
Unfortunately, due to COVID, I am not flying as much as previous so my income has drastically dropped. I am on a sabbatical until the end of 2020 and am using this to spend quality time with family and friends, as well as learn, read, and engage in the financial independence and investing community.
What are some things that have changed? Well firstly I have massively liquidated my physical possessions and slashed my living expenses – I have been selling gadgets, toys and things like gym equipment, which I have put into increasing my emergency fund cash buffer by over double, as well as used this extra cash and savings to try and pick up extra shares of companies whilst the price is depressed.
When it comes to COVID-19 and investing, my investing style has not changed a great deal. I continue to dollar cost average into good quality, profitable companies through a combination of total market index tracking Exchange Traded Funds (ETFs), as well as good quality, old school, low management fee Listed Invested Companies (LICs). This includes Australian domestic, US domestic, and global markets.
I have also been transitioning from a higher proportion of LICs which begun trading at a significant premium to net asset value (8% or so) and selling them and buying ETFs which always trade at fair value.
I have further begun investing in my own business and websites, undertaking web development and webmaster training courses to diversify my income stream further and not rely on my sole income as a pilot. With this, I have been able to invest only a few thousand dollars but now am in a position where I own a portfolio of sites that are generating around $500 per month.
On advice from an accountant, I also crystallized losses in shares by selling the ones I did not particularly want to hold long term (for example index funds with higher management costs than I would prefer) and then instantly rolled this cashback into investments in a similar asset class but with lower fees. This allows me to carry forward capital losses to offset future capital gains.
The best thing about the term “post-COVID-19 world” is 20-20 vision. The fly-in-the-ointment centers on one question- “Are we in post-COVID or the middle of it?”
In my view, we can learn from both these positions. To think “post-pandemic” or “midst-pandemic” is not helpful one way or another.
We are in a new norm that’s likely to last for a long time.
Moreover, it’s changed our collective mindset to one pillared in wariness, caution, and not taking anything for granted. That won’t alter for many years.
As far as investments go, the issue is not all that complicated.
Invest in businesses on the right side of the “virus divide”.
Distance yourself from those suffering (and likely to continue that way).
(1) above includes mainstream online retailers, delivery businesses, technology (an evergreen), health, home gym equipment, hobbies, streaming entertainment, supermarkets, pharmacies, home entertainment, etc. Netflix, Peloton, Amazon, iPhone, Dominos, FedEx, Walgreens, and Walmart are good examples.
Look out for groundbreaking technologies, vaccine-developers, and health-centric enterprises that are mitigating the COVID-19 ills.
The wrong side of COVID-19 includes:
It’s mostly common sense. If the “wrong industries” flip back, it won’t be overnight. Expect a very gradual recovery. You’ll have time to get back in. in most cases, look out for moves to reinvent themselves in compelling ways.
Two main sectors I’d invest in the post-COVID19 world are the following:
Technology:Digitalization is a non-stop process. We live in the world of computers, artificial intelligence, and digital reality. We all can feel its irreplaceable presence especially during COVID19 and our dependence on it in quarantine. Online education, the entertainment sector, automated real-time processes have undergone rapid growth. Startups are where I look to have my next investment in.
Socially Responsible Investment (SRI):Socially responsible investing is a good way to pursue your goals and it’s getting HUGE!
One thing COVID19 came to teach us is solidarity. I have no doubt in my mind that 2020 will go down as a “social activism year.” With every challenge, people are rising to the occasion and opening their eyes to what they can do to create a change they want to see.
SRI’s popularity is already growing like crazy world-wide
There’s no significant downside compared to index funds (the gold standard of stock market investing)
Millennials and Gen Z – are pushing the trend upwards
Fund managers back SRIs for risk-aversion purposes and are planning for a significant increase in demand
It’s good to invest in causes you care about.
While there are more ways to invest in the post COVID19 world, as an investment and finance expert I believe these two are the biggest on the international stage at the moment.
Your first option should be to start an emergency fund if you do not already have one. We do not know how badly this is going to affect jobs, the economy, or our lives, and for how long. Having a savings account that can keep you above water for 3 to 6 months should be priority number one.
If you already have a dependable emergency fund, investing in shares is the best thing you can do right now.
Taking out money right now just because you think its gonna fall further may leave you with a loss but investing is a time game and the market always jumps back. If your long-term investment goals have not changed and you do not NEED money right now, stay put and invest further.
You are going to get to invest at rock bottom prices and reap the rewards later.
The market may seem a bit of a mess right now but this is not the market’s first rodeo. It will bounce back. Unless you are 62 and nearing retirement, investing right now is the best thing to do for your future self. You will make crazy profits when the COVID-19 craziness dies down.
Another option would be to pay off credit card debt, your mortgage loan, or your student loan debt. This would make more sense than investing if you have a lot of debt to pay off and a lot of interest making it worse. It could help you get back on your feet and take a step closer to financial freedom.
Especially now, when institutions may tighten the credit score requirements for people who are taking out loans (given the situation), paying off debt and bettering your score could be imperative to your future finances.
Lifestyle, businesses, routines, and everything else has been affected by COVID. It has brought changes to the way of thinking, priorities, and investment approaches.
All these factors will continue to be influenced by COVID unless it is over. The recovery will be highly different in different parts of the world because the pandemic has struck everywhere with a different intensity.
So, there cannot be just one general rule for investment. It will vary depending on your location. A ‘W’ shaped recovery is predicted, which means a series of rising and declining in the financial industry. The best way to invest in these times would be to have a defensive investment approach.
Investing in quality companies will be the trend as they will continue to thrive and quickly make it through the struggling phase. You can invest in areas which are benefitting from the current crisis.
Two main sectors thriving in these conditions are digitalization and the healthcare sector. 5G will further help the growth of the tech sector, and will also play a vital role in the advancements of the healthcare sector.
It’s clear, COVID 19 changed the world in many ways. But, to be honest, it hasn’t changed my investment strategy.
My favourite strategy is investing through index funds, easily diversifying. When investing in index funds, with just one operation you diversify in stocks, geographically and temporarily, and that’s why it’s my favourite strategy.
I don’t think COVID has changed that. It’s true, some companies will suffer, and it’s likely that the economy will resent, but I invest long term, so I’ll just keep using the same approach.
If the intention is not investing long term, and instead someone wants to invest short and mid term, Covid definitely changed the situation.
A lot of sectors and companies will suffer in the near future. Travel and tourism companies are a clear example. Instead, others like internet companies, could thrive.
Another option could be real estate, since it’s likely that we see a significant price drop, due to the coming crisis
There is just one sure thing. The most important thing is investing, because it’s a basic in personal finance, and covid hasn’t changed that.
Investing post-COVID19 is simple. Avoid magic promises of what is “coming soon” as a COVID19 vaccine may be years away, just like a profit for Tesla Motors. The following tips will assist you to invest simply, safely and securely for the longer-term
1. Create a cashflow plan (millionaires don’t have a “budget”, they have a “Plan”). This can be on paper or a spreadsheet, whatever is easiest for you
2. Track every single expense, no matter how small, for a minimum of 30 days, ideally 90 days. All successful millionaires do this for themselves and their businesses. A business or an individual who does not track their money will not be successful, it’s that simple.
3. Identify key areas where you can cut expenditure:eg. 10% less entertainment, buying in bulk, shopping around for better deals on insurance, utilities, and so on. Aim to save 5-10% on each expense (more if possible)
4. Once you have managed to identify savings, start a new account where you can set this aside every week or month. Pay yourself first before you pay the expenses. Aim for at least 5% to start with, 10% up to 20% is a sweet spot.
5. Use an online search engine to identify which publicly listed companies benefit from your unique specific spending pattern (yes, we refer back to #1, the “Cashflow Plan”).
6. Open an online trading account and invest in the companies who make money every time you spend. For example, if you pay a mortgage to a bank, you can invest in the bank by buying some of their stock. Ditto for groceries, fuel, and so on.
(Sometimes there may not be an easily identifiable parent company into which you can invest, eg. if you purchase electronic appliances direct from China, you probably cannot buy stock in that company. In this instance, you can use your detective skills to ascertain where the Chinese factory spends the money after you give it to them. For example, they may have to buy raw materials for manufacturing, such as copper, silver, gold, or plastic, and you can invest in the mining and industrial companies, not the manufacturers.)
7. Rinse and repeat. Soon, you will save up 10%-20% and start investing in publically listed companies with which you are familiar because you spend your money there. Over time, your #1 cash flow plan will change, so change your investments.
For example, after Covid19, you probably traveled less (sell airlines, sell Hertz), and used video-conferencing more (buy Zoom, Microsoft, or competitors). Your spending patterns will change again and again, possibly annually as you go through life, so be sure to keep your investments in line with your cash flow plan and be sure to “invest where you spend”.
This method will not make you a millionaire overnight (just like you don’t lose 20 pounds or become Mr /Mrs Universe overnight), but it will happen if you stick to the plan.
The great benefit is, aside from becoming wealthier, you don’t need to watch the financial news or keep abreast of any technical jargon. All you need to do is watch where you are sending money every month, continue to “invest where you spend” and change your investments anytime your spending changes.
Investing doesn’t always have to be in the stock market. Sometimes, you need to invest in yourself and your personal financial assets to be able to invest more in the future.
Oftentimes it’s an excellent idea to invest in your debt before spending a lot of money elsewhere. By paying off your debt ASAP, you’ll free up more money in the long run to spend on other opportunities, and you’ll save money on interest and other possible charges.
The higher the interest rate on an account, the more money you spend on that debt. Consider putting money toward your higher-interest accounts first to lower the amount of money you’re spending over time.
It’s difficult to invest as much as you want in other areas, such as a 401K if you have high monthly payments on a loan or credit card bill. By paying off your monthly credit card statement, and eliminating other debt early, you allow yourself to put more into your 401K and other investment accounts.
Don’t put all of your eggs in one basket. We have seen from this pandemic just how quickly the world can change. Those who were heavily invested heavily in airlines, hotels, energy, financials, or other industries impacted by the coronavirus have seen the value of their portfolio drop significantly.
Use some of the many low cost, diversified index funds available to build a nest egg that will be able to weather not only this crisis, but future ones as well. Total Stock Market index funds, whether from Vanguard, Schwab, Fidelity, or anyone else have costs (expense ratios) below 0.10%, and invest in thousands of companies. Likewise, Total Bond Funds invest in a variety of bonds from the U.S Government and highly rated companies with a wide variety of maturities. This will provide you protection from volatility in the stock market, interest rates, and inflation in the future.
Once you have found those high-quality investments, focus on what you can control and don’t worry about the move in the stock market every day. Look at your savings rate, can you cut expenses to save money? Can you earn extra income to save more? Being able to maximize Roth IRA savings, or 401(k) contributions will have a much more significant impact than constantly trying to pick better performing investments.
Whenever giving investment advice, the most crucial element is the perspective of the person seeking advice. For a newer investor, there is no better option than just investing in an indexed ETF that tracks the S&P500.
Experienced and self-directed investors should continue to ensure they have a diversified portfolio that is not over-allocated in any particular sector.
Technology stocks will probably be the best growth stocks for the long haul, but at today’s valuations, it is highly likely a rotation from tech to value will occur. That is why stocks in the following sectors are worth a look to invest in:banks, insurance, consumer defensive stocks, utilities, and telecommunication services. These stocks will benefit from a recovering economy, and investors can collect a dividend until that time.
Another change that investors need to factor in their investment decisions more than ever are the leadership team, regulators, government agencies, social and environmental impact. Investors used to only care about a stock’s profitability and if it hit the estimated numbers.
Companies are finding themselves in the spotlight, as we have recently witnessed from doing business in China or not having a diverse enough board. Of course, scandals and financial crime are never good, but as we are seeing with the banks right now that those reports are now reigniting calls to break up the big bands, expanding an investor’s regulator risk. Investors need to ensure they do broad research about a company outside of its financials when investing in the post COVID-19 world. That will be the “new normal” for investing.
Finally, we will probably continue to see investors using stable dividend companies as a bond alternative, which will keep equity valuations on the rise until inflation beings to creep back up.
You’ll find most financial advice falls into the category of set it and forget it. Those who don’t react to the market and hold their stocks are better off in the long-run.
The same applies to those who invest in dividend stocks, but comes with the added bonus of seeing dividends pour into their account on a regular basis.
That little extra money coming in, on a consistent basis, regardless of market swings, helps give investors the peace of mind to stay in the market regardless of storms. I expect we’ll see more dividend investors post-COVID who appreciate that extra comfort moving forward.
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