The UK economy faces its worst downturn in the past 3 centuries, according to the Bank of England and other British experts. But I believe the economy will bounce back when the lockdown is lifted.
With the uncertainty of how things will work out, new and seasoned investors feel hopeless as the economy has been affected by the pandemic.
Now, how to be positioned in the world of investment despite the current situation throughout the UK and other parts of the world? In this guide, you will know some tips and tricks to drive results and minimize risks.
Diversify your Portfolio
As a beginner, it’s advisable to focus on a specific investment. Then, it is crucial to try other opportunities. But some are likely to be contented with their limited and current investment. While the transition is complicated, the diversification of your portfolio is paramount, according to experts.
If you’re a real estate investor, try a mix of fixed-income assets (corporate bonds), shares, and alternative investments (gold) to help spread the risk.
Which is better between saving and investing? In saving, you have the money you can withdraw right away. In investing, there’s a long process to follow.
In terms of safety, saving is the go-to option. There’s no risk at all.
In investing, on the other hand, you may lose your money in just a blink of an eye. But there are forms of investment that are worth the risk. Real estate, stocks, bonds, index funds, mutual funds, and REITs are good to try.
Invest in Funds
Most economies have been affected by the pandemic. But some technology companies have acquired billions of dollars since the lockdown has been implemented.
Netflix, Amazon, and Zoom, for example, have experienced a sales increase. Experts also suggest that the growth will continue even after the pandemic.
So, investing in a fund that holds a variety of companies is a brilliant idea this 2020 and beyond.
The Axa Framlington Global Technology fund is experts-recommended. There are also other types of funds you can take advantage of, and careful research can come into play.
Consider the Healthcare Industry
Deemed recession-proof, healthcare is expected to see considerable investment in the future, according to experts.
The Polar Capital Global Healthcare Trust, for instance, is a perfect investment opportunity for beginners and even seasoned investors in the UK.
Whether you’re searching for an investment that focuses on companies in the healthcare, biotechnology, pharmaceuticals, or medical technology services, don’t look further than the Polar Capital Global Healthcare Trust.
A £10,000 investment would be £14,300 within five years. So, invest in PCGHT and other opportunities in healthcare.
Think About Quality Companies
What’s the factor you consider when searching for investment online? Of course, you direct your attention to companies that are not affected by the lockdown.
How about the companies that are taken a hit? Are they worth it? Definitely! For example, Ecolab, a provider of cleaning solutions, has been delivering more efficient products than its competitors. Also, its market share grew during the recession in 2008 and 2009.
Rentokil, on the other hand, competes with various local companies in the UK. Also, it can gain market share through the acquisition of smaller players.
Don’t Panic Sell
During this unprecedented time, you may hear your colleagues say to keep calm and carry on as an investor. It might seem counterintuitive to sit back and relax while the market is down to 15%. But being patient will pay off after some time.
While it’s human nature to panic sell, avoid that thought in mind. A long-term mindset or logical approach is always critical. Take note. A rebound usually follows every downturn.
Timing the investment industry is a bad strategy. The secret here is to notice when stocks are on sale as it’s a great buying opportunity to grow your ROI.
If you panic sells one of your investments because of the economic decline, you’re just buying high or selling low. Avoid this kind of strategy as early as now.
Panic-selling makes you miss the chance for a bigger ROI. When is the right time to buy a stock? Of course, you should take advantage of options that are undervalued. Then, sell a part of them when the market is currently booming.
Identify Whether or Not an Investment Mix is Right for You
As an investor, it is necessary to check if an investment mix suits your unique needs. Make sure to avoid large overindebted/smaller/high growth companies and junk bonds due to the high risk.
Companies with strong cash flow, low debt, recession-resistant business models are generally safer.
Other people also hold investments in trusts and funds, so review them as well.
Check your Investment
During the pandemic, we’re forced to stay at home, which is a good opportunity to check our investments to conduct a careful and thorough analysis. If you don’t know how to get the process done on your own, let an expert handle the job for you. Just be careful when searching for the right professional. Also, you can ask your colleagues, relatives, and friends for some pieces of advice.
Try Businesses that Offer Consumer Staples
Another industry that remains stable is the business that provides consumer staples (food). Among the solutions, the Lindsell Train Global Equity stands out from its competitors. It now has a large holding in Unilever that produces popular products across the globe.
Hold Money in Corporate Bonds
You’re probably looking for ways to hold money in corporate bonds. But what are the best options in the UK right now? Well, there are multiple choices. The TwentyFour Corporate Bond fund deserves your attention.
If you are not familiar with the TwentyFour Corporate Bond Fund yet, it usually invests in rated bonds from the Royal London Corporate Bond and other reputable companies in the UK. From £10,000, it has turned into £12500 over the past five years.
To know more details, it’s time to contact an expert. While it requires additional cost, the quality services will be meaningful in the long run.