What to Do Now That the Pandemic is Causing Economic Crisis
To say that we’re living in uncertain times is to admit the obvious. Businesses no longer run the way they used to, and everyone can feel the economic impact that staying at home has caused. UK’s Organisation for Economic Cooperation and Development posits that the UK is even likely to be the worst-hit economically among other nations of the world that are developed. The country’s GDP has dropped by 11.5%, and the effect is already being felt by everyone.
If you have money or are still able to earn during this time, you may be wondering which course you should pursue. Should you save money or invest it in something? It’s normal to have fears and be unsure about things, but a careful analysis of issues can lay much confusion to rest.
You must feed yourself and your family while this period lasts. Your mortgage and other essential utilities, too, have to take precedence above any other decision you may want to take. It is only when you are sure that your immediate existential needs have been met that you can consider either to save money or invest.
So, if we rightly assume that you are still able to fend for yourself and your dependents, there is no reason you shouldn’t consider investment over savings. When you leave your money to sit in banks, you get little or no interest on it, as the best any good commercial bank will pay as interest may not exceed 4%. And if as predicted, the economy slides a bit into recession, your money in the bank will most likely lose its value.
But with investment, you can continue to keep the value of your money or put it into productive use.
In determining the type of investment you would dabble into this time, you need to do some homework. First, you should have enough information about how the investment works and the associated risks. Be aware that current economic limitations may further increase the risks of investing in stocks and other investment types. That’s why getting the facts right is essential.
From your enquiries and research, you would have known which investment is best for you. Of course, how much you have will also determine how much you can invest. Another factor that may also determine your investment choice is how early you would want to start getting the benefits. Investing in properties, for instance, may take some time before you start reaping the benefits. But if you need a regular source of income, you may consider fixed deposits, bonds, and others.
Choose a Reliable Investment Platform
Given the volatility of the moment, you need to check out the reliability of the company or platform you want to invest in. Read reviews and have definite rules. If a company’s reputation is questionable, you should beware of putting your money in their stocks or property.
Take time to buy into companies that have robust balance sheets and wide Moats, and forward earnings potential. Don’t bother about the occasional negative portfolio. Look at their overall charts.