Like some previous pandemics, market volatility can be a very stressful time. COVID-19 isn’t an exception. The pandemic has caused a widespread financial impact. Take care of your health and follow the advice of public health authorities.
As part of your financial preparedness, you may be thinking about what you should and shouldn’t do, and how a pandemic could impact your investments.
While each market downturn is unique and it is difficult to predict the future, there is evidence to support being optimistic when thinking about the long-term.
Markets have historically recovered from downturns and continued to grow. Here are 5 tactics to help you navigate through the financial impact of coronavirus pandemic.
5 Tactics to Ride Out the financial impact of COVID-19
Budgeting
You may want to take a look at your personal and/or family budget. Your income may change and so should your expenses- time to figure out what a necessity vs. a want. Here is a simple budget template to use.
Avoid Continuously Checking your Portfolio
Check your investments periodically, but checking on them too often can cause unnecessary stress and anxiety. If you are investing for the long-term, short-term volatility is expected, especially when there is uncertainty .
Avoid Trying to Time the Market
“Time in the market is better than timing the market.” it is difficult to know when to buy at the lowest price and when to sell at the highest price. For long-term investors, holding on to your investments, even during downturns, has generally been an effective strategy assuming that your financial goals and situation remains unchanged.
Avoid Fear Based Decisions
A pandemic can lead to hasty decisions, such as panic selling or buying stocks on an impulse. It could also make you more vulnerable to fraud. Don’t’ be fooled with next best stock!
Review Your Financial Goals
During a pandemic, unexpected events impact your finances. For example, if you become unemployed, you might need to cash out some of your investments for short-term expenses. Review your financial goals to make sure your investments align with them. Now you know how to deal with the financial impact of COVID-19.
