Global stock markets never looked as choppy as this. Markets suffered substantial falls earlier this year when Covid-19 become widespread and countries lockdown. The FTSE 100 began to level out as investors started to feel more confident, and in early June, it even hit a three month high. But it was announced in August that the UK was officially in recession, and fell again down the Footsie.
The FTSE 100 has fallen 20 percent since the beginning of the year, as it did on August 14. The yellow metal’s price plunged in March, but it has recovered sharply. Overall, as of August 14, it’s up 28 percent since the beginning of the year.
With lower share prices, though, now might be a good time to pick up some bargains. Gemma Godfrey, Times Money Mentor’s executive editor, discusses the possibility of closing down pubs, restaurants, theaters, and cinemas. Some buyers have already capitalized on cheap shares. AJ Bell says its investment platform was running at twice its usual summer rates. Synairgen, Lloyds, Boohoo, Vodafone, and International Integrated Airlines were her top five traded stocks in July.
Should You Invest?
It was a resounding yes from 70 percent of investors who claimed the fall in the FTSE 100 represented a good investment opportunity because, according to research carried out by exchange-traded fund provider GraniteShares in March, many of the stocks were massively undervalued.
A surge of private investors joined the stock market in April aiming to pick up bargains – according to data provider Calastone, £2.6bn has been invested in UK equity funds alone, the highest monthly amount on record and six times more than an average month.
Know, a “loss” is a loss only if you sell the assets. So how quickly will you need the money-are you saving for the long term? – And if you accept the risks and bear a loss, should stock keep dropping.
Investment Golden Principles
Here are our four golden principles concerning investment during a financial crisis which can be useful as other ways to finance your products:
- Remain calm
Many of us are feeling stressed at the moment, but being reasonable about your investments keep your finances on track.
- Focus on your goals
M1 Finance services investment platform notes: “Everything depends on the type of investor you are, your circumstances, priorities, needs, and risk attitude. The principles of never investing shift – the center of all this are the value of diversification [spreading your capital across various funds and company shares, through a range of sectors, properties, or countries].
- Start drip-feeding away your money little by little
If the markets go further down, you buy at a cheaper cost, and it will help smooth out the returns, in the expectation that they can rebound and expand over the longer term.
- Don’t hesitate to use your tax deductions
With an ISA, you can spend tax-free. You get an immediate uplift with a pension, and also a lifetime ISA, as the government will typically add some extra cash every time you put in more money.