The spread of COVID-19 has put many countries in quarantine. Several industries had to halt their processes for fear of spreading the disease. Although necessary, these disruptions have taken their toll on the financial markets. In these unpredictable times, why bother with investing during a global health pandemic? Throughout its history, the world has gone through wars, famine, recessions, and all things in between.
As a consequence, economies around the globe frequently fell, but they also repeatedly rose. Despite whatever misfortune may take place, be it an armed conflict or a health pandemic, it does not last forever. Even if they do happen for a while, just like the COVID-19 pandemic today, trades still take place, albeit more cautiously. Once this health crisis passes, as all things do, the markets will rise, just like how they did when both World War I and the Spanish Flu subsided.
ETFS are a Great Option
When that happens, you will want to have assets that you can trust to ride the rising wave. There are lots of viable companies whose stocks will regain their strength. The real question is which ones to choose. Since this pandemic may have put a tight lock on everyone’s budget, you may not be inclined to buy as many and as various stocks, as you usually would. Sticking to only one stock is also inadvisable. After all, diversification is key. When you consider all these, exchange-traded funds or ETFS may be your best bet. Because ETFS is essentially a pool of stocks from different companies of an index, when the indices rise, your ETFS will too. No longer will you have to debate with yourself how Company A and Company B will fare against each other during and after this health crisis.
The Sectors That Can Endure
During these tough times, many industry sectors will take most of the punches. As governments and health authorities implement social distancing, you can bet that the businesses that will get hurt will include those that rely on social gatherings. Fortunately, some sectors can survive. During the Great Recession in 2008, 34 stocks from the S&P 500 had positive returns. The top of these stocks included discount retailers. This outcome is understandable. In 2008, people’s buying capabilities were lower. In response, people either buy less goods or buy cheaper options.
Thus, during a health crisis like today, it is intuitive to think that the health and biotechnology sectors will endure. The eyes of the entire world are now on scientists and health care professionals as they scramble to combat COVID-19. Although people will all win as one when this crisis blows over, the health and biotechnology sectors will be some of the largest reapers of victory. When that happens, you will want to have ETFS that include them.
As people still try to maintain a sense of normalcy, working from home has become common. This contingency has made the services of software companies that allow remote work, such as teleconferencing, indispensable. As more of the world relies on these services, their values are likely to rise. Thus, the odds may also be in favour of information technology sectors. Consider ETFS with these companies as part of your portfolio.
The world right now is in crisis, but business still has to go as usual. People’s resilience is what can assure you that this pandemic will also pass. When it happens, be ready to reap the rewards with smart investing.
Author Bio: Jack Sylvester is a freelance writer, He is extremely fond of anything that is related to ghostwriting, copywriting and blogging services. He works closely with B2B businesses providing digital marketing content that gains social media attention. His aim to reach his goals one step at a time and He believes in doing everything with a smile.