Friday | 17 April | 2020
By Anja van den Berg
The Covid-19 pandemic is creating havoc with emotions and has the potential to lead to a world economic recession.
But investment experts call for calm among nervous investors, advising them to take a long-term view and make the most of investment opportunities.
Investec says that, amidst plummeting markets and public hysteria, it’s important to remember that investing is a long-term game and panic selling can do more harm than good to your portfolio.
Steven Nathan, CEO of 10X Investments, says emotions cause unnecessary stress and seldom solve problems. A levelheaded approach, which combines knowledge with action, is your most significant financial ally during the Covid-19 crisis.
Nathan says that markets are expected to have recovered most, if not all, of the losses within five years. And, he adds, the stock market is all about long-term, defined as a time horizon of five years or more.
Alexander Forbes offers the following levelheaded tips for managing your investments during the Covid-19 crisis:
- Focus on your investment goals and stick to your long-term investment strategy.
- See the glass half full. Markets are at a low point now, which represents a buying opportunity.
- Don’t automatically dismiss your investment manager, who is at the bottom of the performance table, because that could be the time that the manager may start to outperform, allowing you to recover from your underperformance.
- Adopt a long-term view. Remember that successful investing is about time in the markets, not trying to time the market.
When it comes to day to day personal finance, you would need a short- to medium-term management plan.
BusinessLIVE recommends that you approach your bank to discuss the options of a payment holiday for expenses such as mortgages, student loans and vehicle finance. A payment holiday – when a lender gives you a break from repayments on a credit agreement – could provide significant relief at this time. The banking industry encourages clients to contact them to restructure debt or change payment arrangements if they are struggling.
Ironically, you may be able to save some money during the lockdown period. Your transport costs will probably be lower and you won’t be able to spend money on fast-food takeaways or dining at restaurants. Some gyms allow you to freeze or suspend your membership. You may also be able to save by doing disciplined online shopping.
If you can save money during the lockdown, use it to repay expensive short-term debt, such as a credit card or store accounts.
The Money Manual: https://www.themoneymanual.com/stay-financially-calm/
* All information was correct at the time of publication.