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Is this the time? How to and Where to Invest during a Crisis?

The History

THE HISTORY

The year 2008 is the last time when the world stock market hit its rock bottom. After that, in recent days we are watching a similar scenario in the global market because of the Corona Effect. Will it repeat and lead to a crisis? Is the Recession already here? If so, How to turn this into our advantage and build wealth? In this article, I will explain how to invest during crisis and how I am going to do it.

Global Situation

GLOBAL SITUATION

But before talking about that let us analyse the current situation of the world. Most of the countries are going into lockdown mode to stop the spread of the virus. There is a huge fall in oil prices. Not only the oil sector, many other sectors got affected because of the current situation. But this whole situation may be temporary, once this virus gets eradicated everyone goes back to business and the economy will be back on track.

What do I do?

WHAT DO I DO?

I am a trader so I usually short stocks while they are falling to make money. But to make wealth I need to invest. Since I am weak at fundamental analysis I don’t take the risk by putting all eggs in a single basket. I think you understood what I mean i.e., investing all money in a single stock. So, I diversify my portfolio. 

How I diversify?

HOW I DIVERSIFY?

But how do I do it? By investing in mutual funds? The answer is NO. Because of the expense ratio charged by the Mutual funds. I don’t like them and personally, I am not a fan of mutual funds.

India is a developing country and I believe there is a lot of scope to grow. So I diversify my portfolio by investing in India’s top 50 companies by investing in a Nifty ETF (Exchange-traded fund). As I mentioned earlier that I am weak in fundamental analysis. So I prefer investing in the Nifty ETF.

You might get one doubt here. Why don’t you go and individually add the Nifty stocks to your portfolio and invest in them? The answer is simple –  The stocks in Nifty 50 always change. If you observe the stocks that were in Nifty 50 a decade ago won’t be there now. So I prefer an ETF. They are easy to manage.

But Is this the time?

BUT IS THIS THE TIME?

Yes, it is. But no one knows where the market is headed to. It may fall further or it may bounce back. Right now, I am getting stocks at a fair price. So, invest my money in ETF systematically (SIP) i.e, investing a fixed amount of money on a regular basis. I believe that this will work for me.

Since I am young, I am ready to hold it for a longer time. Statistically, if we observe, nifty always gave positive returns on a longer span of time. If we invest during a crisis there is a chance of getting high returns in future.

That’s the end of the article. I explained to you how I invest during a crisis. Now it’s your turn. Build your plan, grow your wealth and thanks for reading.
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