Stock investment is my area of interest. This is where I invest my hard-earned savings. I am not an expert on market or have an appetite for technical analysis. I just know enough to make my investment decisions...' investment decisions' not 'trading decisions'. You ought to know the difference between the two if you are interested in the stock market at all.
Let's jump into the topic of concern.
A time of national crisis, if it does not hit you hard, can be an unprecedented opportunity'. These are times when fortunes are lost and fortunes are made. You could end up in either of the sides. Time of crisis often brings the market down to its knees, to the point where it looks like 'this is it'. A nightmare for all those who have an investment in the market...A point where your portfolio is numeric version of a horror movie.
Two things happen in the market at the time of crisis. First, your portfolio is not where you want or ever expect it to be. Second, the prime stocks are a dime a dozen. They are up for grab (as the market is in its knees). If you have the guts and money (obviously). But, there is a catch to it...you must be playing with your own (surplus) money and a long term to have odds in your favor. If that's not the case, in an unlikely event, you might be heading to your personalized crisis designed and executed by yourself.
What to do in the time of Corona/Crisis?
There are basically three things you can do. Buy. Sell. Nothing. Three moves:
- One should stay away from the market at the time of crisis/Corona. Try and hold your portfolio. Avoid selling unless there is no other option. [Neutral Move].
- One should invest in stocks you have been eyeing for but were out of your reach. When the market down grabs more of what you want to hold for a long period, do not speculate, you don't know when the Corona effect is going to wither away. So buy what you can hold....as the old saying, 'bite what you can swallow'. [Smart Move]
- One should sell the stocks you have, go all cash and wait for the market to further get down. Once the market gets to the lowest (as per your standards) start buying. [Over-Smart Move].
What not to do?
- Don't invest borrowed money hoping to cash on the crash.
- Invest surplus money, don't let stocks disturb your sleep and be a cause of your stress. In the time of crisis, you already are stressed out.
- Always know how much you can hold, let go if it is hurting you.
What to remember?
- 'Crisis is inevitable'. This isn't the only one. We will see the crisis in the future too, in different shapes and forms so don't worry if you can't ride the recovery of this crisis. You'll get more opportunities in time to come. Be patient. Try and understand this one, so you'll be ready next time.
- 'Market' will bounce back. We can't be certain of when, but the market will bounce back strong. In the case of Nepal, I think we are yet to see the fall...after the fall we'll see it bounce back.
- 'You are on your own'. As always, you are on your own but in times of crisis, even those who could have bailed you out in short term won't be available. Thus, you are truly on your own.
- Don't buy cheap but quality stocks at a cheap price. Else don't buy. It Is not one-time opportunity.
My Suggestion:
Do what you think is best for you. But maintain physical distancing and take care of yourself.
Also remember, it is same game and it always has same rules. Crisis or no crisis, make your investment decisions wisely.
