Pandemic of 2019 coronavirus-nCoVhas led to chaos in world markets, causing the daily fluctuations and complicating the search for a safe place for your money, according to CNBC.
S&P 500 lost a fifth of its value during the first quarter of the year, this is his biggest loss since global financial crisis.
It is now more important than ever to have a cash buffer, especially if you are faced with difficult times such as the fall in employment in the coming months.
A lot of people think, where would they invest money to eventually make a profit.
At the moment, investors disagree. Some signed on Friday a bill to the US on stimulating the economy of $2.2 trillion means a positive shift in the market. Meanwhile, others believe that the economy will continue to fall.
The financial experts of CNBC Make It expressed in different ways: comments ranged from concerned to cautiously optimistic. Freddy lim, investment Director, Manager of digital assets StashAway, said that current data shows the short-term market crash. While Samuel Ri, Director of investments in Digital Financial Advisory Endowus, said that much still depends on the political response of the United States.
However, they were unanimous in saying that now is a good time to benefit from investment opportunities.
“The ability to make profit in the long term are usually born in such terrible circumstances. This is a once in a decade,” said Ri.
For those who already have interests in the market, this means that you need to keep yourself in hand and continue to contribute. For those who are out of the market, that means you need to start purchasing, while the assets fell in price.
As the case during the last major economic recessions, global financial crisis, those investors who continued to invest in the S&P 500, received a double dividend compared with those who switched to cash only for three months, until recovery, according to Syfe and the CBOE.
Despite the fact that in the current recession do not exist economic factors that caused GFC CEO CEO Dhruv Arora said that these findings highlight the advantages of saving investment in the long term.
“No one knows for sure when we will reach bottom in the current situation, but we believe that the conservation investments will pay off,” said Arora, while advocating a diversified portfolio of shares, bonds and other asset classes.
In that time, amid uncertainty caused by a coronavirus, in the last week, stocks fell, the consultants Make It CNBC agreed that they remain attractive for investment. Moreover, many of them are now sold below their true value.
Steve Brice, chief investment strategist at Standard Chartered Private Bank, agreed that after the emergence of the virus and the adoption of containment measures such as the increase in remote workers, technology stocks and health care companies are likely to increase. But he cautioned that they have yet to fall.
“It is possible that in the coming weeks there will be best moments to buy, because the crisis is growing,” said Bryce.
Bonds, or assets with fixed income, meanwhile, look as attractive protection against stock market volatility, according to advisers. This is because the yield that they offer, back is correlated with interest rates. When interest rates fall, as it was on a global scale after several cuts of the Central Bank, bond yields increased.
“The sharp imbalance in the bond market and the reaction of monetary policy led to the restart, and the bond market looks like a good secure option for investment assets,” said Ri of Endowus.
Bryce agreed, highlighting the Asian dollar bonds and government bonds of emerging countries in the U.S. market as separate items.
In other cases, other assets such as real estate and commodities can help to diversify your portfolio.
A good choice in particular, may be gold, says the Ri, as it provides a hedge against the U.S. dollar. However, as “the class of assets with zero yield” allocation of funds to the precious metal must be small, he said.
As for specific geographical regions, the consultants noted that Asia that originates on the front edge of the flash, it seems, has to recover first.
“We believe that the possible risks have already been priced in,” said Howe of the DBS. — “In particular, we see value in the markets of China and Singapore, because they are traded at the level of the GFC”.
Despite this, many agreed that the United States will continue to be attractive after you get control of the money of the stabilization Fund.
Where to start
Despite the fact that the markets will remain volatile for some time, experts agreed that now is the best time to start investing.
One of the easiest ways for new investors is to use a digital asset management or passively managed index funds. Thus investors should focus on long term goals rather than on immediate financial needs.
“The point is to start small, understand the level of risk, conduct due diligence and stay diversified,” said Evie VI, head of financial planning and personal investment DBS.
“We don’t know how long the pandemic, so it would be wise to distribute your finances out over a longer period, not to invest 100% of your money for once,” she added. — “Invest money that you do not need in the short term, use a long-term approach, to gain an advantage over time”.
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