5 Smart Investing Strategies During the Pandemic | BPI AIA

1. Diversification matters more than ever.
   
   We live in an uncertain time, and one of the best ways to balance risk and reward is by following the age-old saying, “Don’t put all your eggs in one basket.”
   
   People may have different approaches or outlooks towards their investments, but if there’s one thing that the pandemic has taught everyone, it’s that diversifying your portfolio matters now, more than ever.
   
   Since there’s no way to predict how well a particular asset category will perform, setting the right amount of money to different types of investments should be your course of action. In case one of your ventures ends up failing, your returns from other assets will help you manage your losses.
   
   
2. Make investments aligned to your risk profile.
   
   With so much negative news on social platforms and media outlets, many investors have become conservative. Due to the uncertainty that clouds the future, people are starting to pull out their ventures and have even avoided investing altogether.
   
   While this may be a good idea if you’re in the process of securing your retirement savings, it’s a different case for younger professionals.
   
   Now that stock value prices are relatively low, this opens up a ton of long-term opportunities that you can take advantage of. At the same time, you can gain some reassurance knowing that there are government policies in place to protect you in case the country goes into recession.
   
   Investing is a long-term game, and assets that may not perform well today may suddenly rise in value in the years to come. If you’re unsure of whether you should keep your current investments, take some time to revisit and reflect upon your risk profile.
   
   Cashing in or continuing to let your money work for you both have their share of risks, so you need to make a decision based on your current portfolio.
   
   
3. Settle remaining debt as soon as possible.
   
   Don’t let your debt get in the way of your investments. Your assets may be giving you a good amount of returns, but you won’t be able to maximize your earnings if the interest rate of your credit card bills is slowly chipping away at them. Settling your remaining balances before you enter a new venture will give you more assurance and confidence.
   
   You should also take advantage of the current concessions provided by lending institutions. In case you need to make a loan, know that many credit providers are giving privileges, such as low-interest rates, waived transaction fees, and zero-interest installment plans, during this pandemic.
   
   
4. Build a big safety net.
   
   Aside from setting money aside for a retirement savings account, you need to allocate and budget your monthly income for emergencies.
   
   Since a vaccine is still unavailable, there’s still no definite date as to when this pandemic will end. The second wave of COVID-19 cases can suddenly hit the country, the government may suddenly impose another lockdown, and commercial establishments may be forced to cease operations once again.
   
   Financial advisors recommend that your emergency fund must be six months’ worth of your monthly salary. In case your investment doesn’t produce the returns you expected or that you come face-to-face with other unexpected complications, you can steer away from hefty loans with the financial flexibility your emergency fund provides.
   
   
5. Consider professional help.
   
   Stock market crashes, recessions, and investment crises aren’t new. If you’re unsure about what you want to do with your assets, you should turn to those who have survived a similar dilemma.
   
   You may discuss matters with friends who have successfully overcome a similar crisis, or you may even acquire the services of a financial advisor to guide your investments in the right direction. Acquiring another person’s perspective or educating yourself through books and other material can give you all the clarity you need.

Be a Smart Investor

Figures and statistics may give you an idea of where the stock market is headed, but there’s no exact way to predict what will happen in the future. With the pandemic still looming, it won’t be a surprise to encounter market drops in the months and years to come. To secure your financial stability, staying calm, keeping a rational mindset, and careful planning is a must.

Know that the market is and will always be volatile, so don’t let fear get in the way of your ventures. In case you’re still nervous about investing in something big, you can always go for safer options. Luckily, BPI AIA makes it easy for you to acquire a comprehensive life insurance policy and investment plan amid the COVID-19 crisis.

Get in touch with our Bancassurance Sales Executives to learn more.