The word “unprecedented” has been thrown around so much it’s almost lost all meaning. Still, there’s no denying the fact that COVID-19 has created a never before-seen situation for investors. By all accounts, it seems the pandemic is far from over, so knowing how to proceed as an investor is essential. The following five tips will help you lay a solid financial foundation for thriving despite the economic turmoil:
1.Safeguard your super
Many people have been accessing their super early due to the change in rules prompted by the pandemic. However, this is not something you should consider unless you desperately need the funds. Superannuation is designed to be a lifetime investment, meaning you need to look at growth over the long-term rather than watching for (and reacting to) short-term fluctuations. If you’re considering changing your investment strategy, talk to a representative from your fund first. If you have a self-managed super account, find the best SMSF accountants in your local area and get in touch for expert advice.
2. Cover your bases
Do you have an emergency fund in an interest-earning account with enough money to cover you for six months worth of living expenses? If not, this should be your first investment priority. You also need an income and expense structure that allows you to set aside money each month for investments.
To achieve these goals during the pandemic, many people are moving in with family and taking other measures to save on expenses. At the same time, you may wish to look into online work you can do from home and other income boosting ideas to ensure you have the right foundation for your investment. If you’re already in need of debt help, it’s also worth funneling as much as possible into knocking that over before looking at investments.
3. Take tech stock
With the world collectively shifting to a remote working model, now is a great time to start backing the consumer tech sector. Stocks like Microsoft (MSFT), Zoom Video Communications (ZM), and Slack Technologies (WORK) have been performing especially well since March 2020. However, there’s still time to jump in and take advantage of the growth. You should also get stuck into your own research and find tech companies you believe are in a good place to take off in the new work-from-home world.
4. Hot Property
While it may seem an oxymoron at a time that land prices appear to be in freefall, the property market is shaping up as a potentially lucrative opportunity. The global pandemic has forced radical changes to the way we live and work. Most experts predict a shift of the work environment from crowded CBDs to the suburbs. Data is suggesting that commercial real estate in suburban centres will become heavily sought after. With prices relatively low, this could actually be the perfect time to get a foot in the door of what promises to be a high return investment.
5. Vote with your dollar
Research is showing that shareholders are increasingly concerned about sustainability. What does this mean for you? Well, companies that are doing the right thing in terms of sustainable practices, transparent supply chain and laudable labor practices are likely to draw more interest from customers and shareholders alike. By voting with your dollar and supporting socially responsible enterprises, you’ll be getting in at the right time to take advantage of growth.
News anchors the world over seem obsessed with reminding us that “we’re living in uncertain times.” Though this sounds like an investor’s nightmare, in reality, uncertainty is the breeding ground for opportunity. Strike now, and you’ll be investing in a financially free future.