The Coronavirus and Your Investment: Overcoming Headline RisksApr 23, 2020 | 0 Votes by Justo - rate Despite the devastating news about the spread of the coronavirus outside China , investment managers have the job of making sure that their clients' investments are balanced. Find out how!
We are all aware of how volatile the stock market becomes for investors due to any news about events that can generate major changes worldwide. Major natural disasters, political conflicts or a possible pandemic, are some of the reasons that cause people to panic and make hasty decisions.
Despite the devastating news about the spread of the coronavirus outside China and not yet having an effective vaccine in the market to attack this disease, investment managers have the job of making sure that their clients' investments are balanced, in order to provide peace of mind to them and avoid making harmful decisions.
Next, we want to present several premises to help you keep your fears aside and allow you to make correct decisions about your portfolio.
The biggest risk is not the coronavirus, but investing for wrong reasons
It is important that you check if your investment is being made for the right reasons. In this sense, a correct reason would be the study of the market to make a global investment, given that every portfolio of stocks and bonds has had positive results if you evaluate it in a minimum period of 5 years.
On the other hand, a wrong reason would be to follow a recent investment fad. If you entered the business hoping to make quick money and retire in a few months with large profits, your investments require good luck to be successful and, therefore, there is no guarantee or statistical data to support it.
Schedule the time of your investments and get the money just when you need it
Consider that, if you invest your money correctly, having a compound return of 7.2%, in a period of approximately 10 years you will double your investment or with a compound return of 6% you will do it when you reach 62 years.
If you program yourself correctly, you will use your money intelligently at the time you need it, minimizing the impact of taxes and fines when withdrawing it and giving it immediate use. Remember that cash is a sure loss due to inflation and it is basically impossible to make a profit by having it in a bank account generating almost nothing in interest.
Rebalancing, an inversion option that neither the coronavirus can affect
The interest on bonds and dividends that you receive in your account throughout the year are your most powerful weapon to succeed in the market. If you invest that cash flow automatically at a low cost, you will have a way to make profits year after year, regardless of market turns.
It is basically impossible to predict the fluctuations of the investment market, and certainly, with news like the coronavirus everything will get out of control, but, if these premises are applied you can relax and enjoy your future as you had planned.
As for the coronavirus, it only remains to follow the preventive steps to avoid contracting the disease and concentrate on following your daily life as you normally do.