The 2020 pandemic hit many companies hard, while other companies took it as a chance to grow, seemingly unaffected by the state of the world around them. NVIDIA (NASDAQ:NVDA) came out as one of those thriving businesses and achieved gains of 122% in 2020. The company’s graphics processing units (GPUs) were present and needed for trends that accelerated exponentially due to the pandemic, boost...
Ever since the COVID-19 pandemic first went into effect, people have been able to appreciate some of the biggest ups and downs of the stock market in recent history.
What hasn’t happened to the market over the course of last year?
Many companies have paused their day-to-day activities while in the face of bankruptcy, with many unfortunate casualties along the way. Even those who couldn’t afford to cease their activities entirely were still able to notice an evident decline in earnings.
This phenomenon presented itself with such force during the pandemic’s early days that the S&P was down 30% for a month.
Regarding what that meant for investors, it is easy to understand why many opted to sell all their stocks. You might as well cut losses short as quickly as possible, right?
Or even newcomers. Why would they want to join in on the action right now where everything is highly volatile?
Well, there’s no genuine reason for you to be afraid anymore because the events of the past 12 months have taught us more than enough for you to be able to overcome any pandemic-related adversities.
There is no time like the present
When it comes to investing, people usually go for the “I’ll wait for the best moment” mindset. That mindset is probably at its highest point yet, in terms of how common unpredictable the market has become.
Well, that time is right now. Even if you cannot widely appreciate it, businesses are slowly growing back to their pre-pandemic numbers once again. Some have long passed their original numbers within the same time frame.
Waiting for the pandemic to truly end before investing isn’t your best course of action, especially since its end won’t come from one day to the next. It will be a slow, day-to-day process.
And it is happening right now.
Start investing right now and get some of that slow business growth in the form of investment profits.
Be calm, be patient
It has always been a trend among the most significant investment opportunities to “buy and hold”. Usually, it was because the better opportunities came in the form of companies that had an expectancy for growth in the long-run, and you are on a path to maximize your wealth as much as possible.
Well, that still applies today, only on a bigger scale. You can even call it “the golden rule of pandemic investments.”
Many companies have already grown again, and they’re expected to maintain said growth for a while. Imagine what those numbers could end up being once they return to their total capacity.
Now more than ever, you can end up making remarkable wealth if you are patient enough.
However, keep in mind that there’s still a possibility for dramatic drops along the way. You must remain calm when facing said moments. As long as you have chosen the right company (more on that later), any future growth could quickly negate that initial loss.
In short, don’t sell all your stocks at the first bump in the road, and do try to keep a decent buying habit.
Keep diversified portfolios
If you are still worried about potential risks, you can easily counter them by keeping a diversified portfolio.
If you were to invest in several markets and some of them were to straight up plummet while others soar, your diversified portfolio can get the best out of it by balancing your losses with your earnings.
Because the stock market’s nature won’t ever let us make a perfectly accurate prediction, preparing yourself for any possible scenario is a great safeguard, especially with today’s market standards.
Expect the best. Prepare for the worst.
Identify pandemic-related business trends
Identifying trends is vital in stock investing.
It is not hard to notice that many new needs have to be addressed in response to the pandemic. By shifting to a stay-home routine and workflow, tons of people worldwide have had to complement their lifestyles with technological devices and digital services.
Companies behind said devices and services offered their pre-pandemic line of products and even adapted themselves to deliver even more than they initially did to fit those needs better.
In other words, they found newer market opportunities, and they have gone full throttle to innovate themselves to tackle them as they appear.
Try and evaluate which companies fit that criterion. Those not only are trending amongst today’s everyday customers but dominating the market as a whole.
Those companies will reflect the biggest growth the quickest and will most likely maintain that course even after the pandemic.
Tech-focused companies are a big target for this type of innovation, so be sure to check out their stocks whenever possible.
Grow your emergency savings
As another safeguard, you can also expand upon any emergency fund you currently have for a bad day.
Most people have had no current need for expenses such as a dinner out, going to the cinema or a concert, amongst other things.
Maybe you could redirect the budget initially meant for those activities to your emergency savings. You’ll soon start noticing they’re growing.
This can lower the toll of any future payments, helping keep steady personal finances and stable investments. Both excellent measures to make any unexpected changes that might affect you don’t do as such.