Mar 27, 2020  | Tags: covid-19, coronavirus, Investment

Our Insights

When the global share market is plagued with uncertainty, it can not only cause a lot of panic but also a great hesitancy to invest.

However, these financial situations, such as COVID-19, could actually provide an opportunity for new investors or for current investors looking for growth.

An ideal time to invest is when the market is low which is often where blue chip companies who have lost significant share value are likely to prosper in the long-term.

Easy to say in theory, harder in reality! Especially if you're relatively inexperienced as an investor. This is why it is crucial to get good advice.

Your investment strategy will vary depending on the dynamic of the market and your strategy, but here's some key investment ideas for the COVID-19 climate.

Property

In previous periods of uncertainty, property has been a stable long-term investment in Australia. While there will be occasional corrections in the property market, generally it holds great stability if you're playing the long-game and are willing to be patient. There are great property investment opportunities around which can provide an ideal chance to diversify your portfolio. 

Health care sector

Unsurprisingly, the healthcare sector is booming and will continue to grow both during and after the coronavirus pandemic ends. Many healthcare companies, such as pharmacies, vaccine makers and protective gear manufacturers, are gaining great momentum and look very promising for new investors.

Technology

Tech as an industry is already booming globally, and it is continuing to grow and become even more important to society through the COVID-19 crisis.

Biotechnology companies developing coronavirus vaccines have been particularly resilient during the market crash and are relatively safe from the effects of coronavirus. Considering biotech products are classified a necessity, there should be minimal disruption towards the manufacturing of these products.

Smart technologies from companies that are solving real world problems will continue to have success, even when the market is volatile. 

Resource and Mining 

Resource and mining companies are some of the cheapest options to invest in right now. Prices have gone down across the board, with commodity, oils and iron ore all decreasing. Now could be the time to consider jumping in.

Consumer Staples and Amenities

Australian supermarkets and utilities are being considered as some of the most defensive stocks in the market and therefore a safe investment during the coronavirus pandemic.  Electric, water and gas utilities are also appealing stocks for investors, along with companies that provide other basic amenities. Although we may have missed the opportunity with toilet paper companies! 

Communications 

Telecommunication companies of the likes of Telstra and video communication providers such as Zoom video have been performers during the coronavirus as more employees are forced to work from home - 2.13 million people downloaded Zoom on March 23 alone! 

Travel sector – but proceed with caution

Investing in the travel sector will potentially reap great benefits during the bounce back after the deceleration of coronavirus. For example, Sydney Airport is a particularly high-end stock currently being sold at a lower price and will therefore have positive long-term effects for new investors. 

However, we will note the travel sector will be very volatile and therefore investments come with a risk. These risks especially lie with airlines, which run the risk of going broke (as has happened in the past) if they can’t bounce back from the current financial crisis. So, proceed with caution. 

Get Advice

Bear in mind that investing in markets with higher volatility during uncertain times may result in a temporary short-term loss but a long-term gain. There are many considerations. 

Reading these tips shouldn't be taken as the green light to get investing - you need a strategy and advice from an experienced financial adviser before going down this path. Decisions shouldn't be made just because something looks like a "great opportunity", you need to approach it with your long-term goals in mind. 

Thinking about your investment strategy? Talk to the team at Calder Wealth Management. Call us on (08) 8373 3333 to schedule your free initial appointment. 

Written by Ben Calder at Calder Wealth Management.

This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own  circumstances or seek advice from a financial adviser and seek tax advice from a registered tax agent. Information is current at the date of issue and may change.