A global pandemic is generally not the best time to start investing. That, however, does not necessarily mean that all investments are a bad idea. Covid-19 has undoubtedly had seemingly endless effects on both global and national economies, rendering several previously sound investment strategies ineffective.
There are still a myriad of viable options for financiers who wish to put their savings to good use, invest wisely, and grow their capital. This article will explore the steps you can take during these unprecedented times to ensure that your money is in good hands.
Hire a Trustworthy Financial Advisor
First things first, unless you’re an expert on current economic trends, hiring a reliable financial advisor is never a bad move. They will evaluate your current finances and draw up a solid plan to work towards your specific financial goals. Plus, they’ll address areas where you may be losing money unnecessarily, and provide invaluable insight into the best ways to invest and grow your finances.
Even if you consider yourself to be fairly savvy when it comes to handling your money, a financial advisor consistently has their finger on the pulse of the economic world. At the very least, they’ll provide you with a second pair of experienced eyes to navigate the twists and turns of contemporary investing.
Studies have shown that those who hire financial advisors generally end up better prepared for retirement, less stressed about money, learn more about responsible financial practices, and accumulate more wealth.
There is much uncertainty regarding the stability of the stock market during 2021. It has been many years since we have seen such a volatile and unpredictable global economy. There is also no guarantee that it is going to recover anytime soon.
While the successful vaccine rollout in the global North does give cause for optimism in the reopening of trade and tourism, there are still major concerns. New strains of the virus and other ripple effects of 2020s economic crash are major considerations.
A significant portion of relatively safe investments nowadays are in the digital communications sector. The impact of Covid-19 in 2020 saw companies cutting their digital advertising budgets in an effort to lower costs wherever possible. Now, however, consumers have flocked to digital spaces and relied more heavily on ecommerce than ever, which has encouraged companies to up their spending on digital marketing and media. Due to this fairly stable trend in spending, it may be wise to look into digital marketing and other communications services as potential investments in the aftermath of Covid-19.
Another promising sector to investigate is information technology (IT). Despite the global economic crisis brought about by the pandemic, top software organizations have continued to demonstrate upward trends in growth, some even showing accelerated growth in the past two years.
Information technologies like cloud-based software in an ever-expanding user market have proved to be sustainable, profitable, and resilient, even during times of recession. IT is a growth industry in the wake of Covid-19, as many companies are software-based solutions to their financial struggles. More and more companies are recognising the importance of utilizing software to increase their productivity, simplify complex processes, and stay connected. While an overreliance on software used to be a prominent concern amongst businesses, even the most cursory analysis of the fiscal benefits that come from implementing the right software will demonstrate that IT is rapidly becoming an indispensable tool for optimizing a company’s potential.
Essentially, it is extremely worthwhile looking into some hot IT stocks while the pandemic rages on.
Consider a Bond Fund
Buying individual bonds or building up your own stock portfolio may seem like too daunting a task for those whose interests and skills lie outside of the financial realm, especially during a pandemic. If you’re looking for a secure way to generate income from your capital, low-yield bond funds provide several advantages.
A bond fund is generally managed by someone who has excellent business credentials and solid experience. They’ll handle all the heavy lifting for an annual fee. Bond funds are usually made up of a diverse collection of bonds from various sectors with the sole purpose of generating profit for stakeholders. This means that even with a relatively small initial investment, an investor can quickly, easily, and cheaply diversify their financial holdings.
Bond funds can go in various directions depending on the predictions of the fund manager or the interests of the investors. Some funds prioritize security above all else, thus investing solely in bonds that pose the least risk, like government bonds. Other funds focus on high yield but high-risk bonds. There are funds that invest in a number of diverse bonds.
For new investors, bond funds provide a great way to play an active role in their financial future by granting them access to promising investment opportunities that are overseen by experienced economists. Of course, no investment comes with zero risk, but this is a good place to start for novices.
Having a low-risk bond fund can also act as a buffer for any other riskier investing practices. If you want to venture into the stock market but don’t feel comfortable unloading all your liquid assets into potentially volatile stocks, having a substantial low-yield bond fund is never a bad plan.
Don’t Be Afraid To Diversify
In times like these, certainty is non existent.
There is no fool-proof way to invest your savings that will guarantee large returns. In times of extreme fluctuation and volatility, a wise investor does their homework and diversifies. Putting all your hopes on one or two promising stocks can rapidly lead to ruin, even in the best of times.
Now, the need for flexibility and diversification is even greater. Even more importantly, do your own research before investing. There are numerous businesses that are flourishing in the face of adversity, and finding them is key.
There is certainly money to be made for those who are willing to brave the storm, but caution should always precede action.