A lot of my friends are worried these days because of the Corona virus. And not just because of the potential impact on health, safety of near and dear ones, self quarantining etc. But also because of the impact it has had on the stock market. With markets crashing globally, people are getting scared of their investments. Should we take out our investment? Should we invest more? Will the markets ever recover? Yes, corona virus has caused a market crash but this isn’t the time to get scared. If anything, Corona virus has given you an opportunity (shouldn’t be saying this, my good wishes for all affected) to invest.
Learn from history
If history has anything to teach, this would be one of the top most lessons in investing. Any downturn in market historically has always been the best time to invest.
Chris Kacher, M.D. of MoKa Investors, published the following graph of the Dow Jones’ performance since 1896. The chart clearly shows how the index’s peaks and troughs have reflected the U.S. economy’s triumphs and tribulations.
Of course, in the long run you are much better off staying invested. And much better off investing when the markets slump. However, another interesting thing to note is that the recovery time is becoming shorter. Hence, you don’t even have to wait a lot to recover your money.
My advice would be two fold. 1) If you haven’t taken out money from the market, don’t take out now. 2) If you have spare money, that you would not need for next 5-7 years then invest it in the market. Buy stocks of good stable large cap companies and invest in good mutual funds. Yes, corona virus has caused a market crash but it has given you an opportunity to invest. An opportunity to buy low.
Stay strong, we all have beaten a lot many adversities, we will beat corona as well.