Investing in Uncertain Times
I sincerely hope everyone reading this is safe and healthy. These are frightening times, physically, emotionally and financially.
WAYS TO HELP WEATHER THE STORM
Maintaining some semblance of normalcy during the Covid-19 pandemic can be difficult. Most of us are working from home – or not working at all. Social distancing has kept us apart from loved ones and friends. Even simple tasks like shopping for groceries has become a challenge.
Things to focus on are simple day-to-day tasks:
A. Self-check your health every morning to see if you have any of the following symptoms:
· Difficulty breathing or shortness of breath
· Cough or sore throat
· Persistent pain or pressure in the chest
· New confusion or inability to arouse
· Bluish lips or face
· Losing your sense of smell or taste
Remember that experts say the vast majority of cases – 80% - will be mild and can be managed at home
B. Eat healthy and stay hydrated
C. Avoid stress whenever possible try not to worry about things that are beyond your control
D. Create activities to keep you, your kids and fellow isolators happy – read, draw, do puzzles, play games
E. Watch out for the elderly. Make sure they have food, the medications they need, supplies for their animals, and books or other things to keep them busy
F. Be kind, respect other people’s space and be patient
Your investments during this time are also being challenged.
Despite every news source from Forbes to CNN offering advice on what contingency plans to make moving forward to protect your investments, it’s hard to foresee the future and even harder to know how to react.
The truth is that nobody really knows exactly how this will play out.
Forbes Magazine predicts two Scenarios:
The Benign Scenario: Coronavirus blows over in a few months as prevention measures and warmer weather help. We avoid a full-blown recession, most businesses recover by year-end, except perhaps a few of the most affected that take a bit longer. Markets stabilize and investing returns to normal.
The Gloomy Scenario: The health impact on our society is far more severe than we hope. The global economy is tipped into a deep, multi-year recession. This recession is accompanied by an initial credit crisis that causes many financially levered companies reliant on the capital markets to go bankrupt. Many other companies’ profit streams are depressed for many years to come. Stock markets spiral downwards for years before stabilizing.
If you rely entirely on the stocks, there is no telling when the market will recover, but if you have the time to wait it out, most stock market gurus suggest you do that. Since WWII, there have been 12 bear markets, with the average loss being approximately 35%, and lasting a little over a year. Typically, however, they regained their losses in another two years and often rallied to new highs.
At this time, you may consider in investing in other options. There are a wealth of diversified investment opportunities available to accredited and sophisticated, passive and active investors, such as ATM Machines, Self-Storage Units, Multi-Family properties and Clean Energy Solutions.
The thought of investing in anything during the Covid-19 pandemic is probably not a priority, but with interest rates so low and CARES Act IRA loans, investing is just what the economy needs right now.
Next week I’ll be talking about Self-Storage Investment opportunities.
Best wishes to all.
Please stay safe, happy and healthy through these trying times.