(Newswire.net — March 18, 2020) —
The stock market is experiencing some serious turbulence of late. The Covid19 strand of Coronavirus is not only playing havoc with people’s lives around the globe, but the stocks in which they trade too. This pandemic has taken investors by surprise, with many expecting the next big financial crash being far more likely to come as a result of internal trade wrangling, rather than being something as tangible as a flu-like virus. With companies shutting down for what could be months, airlines cancelling up to 80% of their flights, and belts being tightened in almost every industry imaginable, it is fair to say Covid19 has already left a mark on the world, and that mark is likely to grow ever more prominent in the coming weeks and months.
Whilst this can spell disaster for those who are already invested in certain stock, it doesn’t mean that there are no opportunities to be had for those looking to invest in these volatile times. As such, many of you will be jumping straight onto your PCs or apps for trading indices, and looking at which markets will provide you with either short term gains, or more likely, long term gains once the situation stabilises.
Unprecedented times
It is worth noting that this particular situation we find ourselves in, is, to put it bluntly, particularly volatile. Wall Street ceased trading twice in a day last week, in an attempt to combat the panic that Covid19 has unleashed on the trading world, and a 33% drop in the FTSE 100 is sure to panic even the most stoic of current investors. If, however you have been looking to invest for a while but haven’t quite dipped your toe in the water yet, a sea of stocks that would usually be out of reach, are now very much more affordable than they once were. As the situation hits rock bottom, the only way is up (as the saying goes) and as such, it is worth casting an eye over which stocks have dropped drastically, and if you believe you can invest for a considerable time (i.e long enough for the pandemic to be over) then it may be extremely worthwhile to do so in the long run.
There are certain sectors of the economy that should weather this storm particularly well too, and even come out of the situation looking slightly better than before. So-called ‘defensive stocks’ such as gold, food companies and healthcare stocks are less affected than the likes of airlines or tech companies, mainly due to the stability (or increase) of demand. Gold has been a notoriously stable buy during troubled times too, so expect to see demand skyrocket as the crisis worsens worldwide.
Not all companies are adversely effected
Whilst physical tech companies will obviously take a hit during a period of time when their production lines are affected, some in the software industry should actually see a boom, as people move their working lives away from the office, and into their homes. Companies such as Slack Technologies, and Zoom Video Communications will be front and centre of many people’s work lives throughout the next 6 months, and as such we can expect to see growth in this sector that would otherwise have been far more level. Entertainment companies such as Netflix, video game producers such as Electronic Arts, and home exercise solutions such as Peleton (PTON) are set to profit as people spend months on end at home, rather than visiting the cinema or enjoying their weekly trip to the gym.
In these unprecedented times, it pays to take a step back, and see just how your own life will be affected, and plan to invest accordingly. Many of the investment opportunities, and indeed the pitfalls, come down to commonsense. Volatility is not necessarily a bad thing, and neither is actually investing at a time like this. Some people out there may think that attempting to profit during such times is bad karma, but in fact, quite the opposite is true. For the world to return to normality, and our economy to bloom once again, people need to work, companies need to sell, and stock needs to be invested in. So open that trading app, and start weighing up your next move!