Sombudha Adhikari gives his own take on the stock and bond markets during the COVID-19 pandemic.
COVID-19 has ravaged global markets. While stocks and bonds are beginning to rally as some states and countries reopen their economies, many people have already had to pull their money out of the market just to pay their bills. As a result of these uncertain times, stock and bond markets have fluctuated drastically.
So, where does this leave the average investor? Is it a good or bad time to invest in stocks and bonds? Sombudha Adhikari — a successful software engineer and business manager — has some important insights that can help answer these questions for investors. Let’s take a look at what Sombudha Adhikari had to say:
Sombudha Adhikari: 5 Tips For Investing In Stocks and Bonds During COVID-19
Though Sombudha Adhikari has a lot of advice regarding smart investments, he chose to narrow down his analysis to five key tips for nervous investors:
1) “As COVID-19 shakes up markets around the world, it’s tempting to shift from stocks to bonds. While you should always have a healthy mixture, this isn’t necessarily the best strategy right now. I usually recommend maintaining 90% stocks to 10% bonds, and I don’t see a need to stray too far from this ratio just because of COVID-19,” explained Sombudha Adhikari.
2) “Though they’ve already started to rally, most stocks have yet to completely recover from the initial drop in March. In fact, they’ve continued to waiver through much of April and May. If you haven’t invested your available funds in the stock market, now is the time to do it. The economy is in the process of regaining its strength after the initial shock of COVID-19. Those who get in while the prices are low will reap the most benefit,” said Sombudha Adhikari.
3) “I’m a big fan of stocks. That said, I’m not a big fan of taking on more risk than you can handle. If you saw a reduction in income due to COVID-19, you may not be able to take on any additional risk. If that’s the case, invest slowly. Don’t try to jump on every opportunity you see, because you might have to turn around and sell those stocks, which will only hurt you in the 2021 tax season,” Sombudha Adhikari explained.
4) “Everybody wants to get a headstart and invest in companies that are developing vaccines for the Coronavirus. As of now, there are hundreds of companies working on the same thing. The chances of investing in the one, or two, or three that ultimately take off is very small. Your money would be best spent elsewhere,” Sombudha Adhikari said.
5) “The real estate market is one of the few sectors that stands to benefit from COVID-19 in the long-run. Yes, people are struggling to pay their mortgages and may not have the funds to buy property. However, real estate is all about the long game. Ultimately, the economy will completely recover and real estate will be back at the top of its game. So, if you can, focus on real estate funds and ETFs to strengthen your portfolio post-COVID-19,” said Sombudha Adhikari.