How to Invest During COVID-19 PHASE in Stock Market: Stock markets are one of the most popular investment avenues for long term investors. People invest their savings in the market to make wealth for themselves in the long run. In today’s time when the market is hit by COVID-19, the volatility is at peak. Nifty and stocks have fallen significantly. This provides an opportunity for long term investors to buy good quality stocks at very reasonable valuations. In this article, we will list the ways through which you can invest during the COVID-19 phase in the share market.

How To Trade During COVID-19 Phase | Part 1

How to Invest in Stocks

  • Accumulate Cash

The major issue with the investors during the Corona Virus hit markets is that they do not have cash in hand. They lack liquidity and ultimately miss the opportunity of purchasing quality stocks at lower levels. The best strategy to follow during volatile markets like now is to keep cash in hand and always be ready to invest the funds when there is a sudden fall in the share prices.

  • Invest Slowly

The markets are in a continuous downtrend due to Corona Virus. The continuous fall in the share price often makes the investor greedy to invest at any level of the share price. This mistake must not be made. When the market is in a continuous downtrend, it is always advisable to invest in bits and parts. Never invest your whole kitty at once. For example, if you expect the bottom for Nifty to be around 5,500 points then you can systematically plan to invest at various levels of Nifty during the downtrend. Another strategy that you may follow is investing a certain percentage of money at every 15% fall in the market or the share price.

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  • Invest in Quality Stocks

When Nifty is falling, there would be a fall in many large cap stocks that form a significant part of Nifty. The same is happening to the market when the world economies are hit by the Corona Virus crisis. The best strategy at the moment could be to invest in the stocks of large cap or blue chip companies since their price has fallen drastically. By investing in quality stocks, you have the peace of mind and assurance that these companies would again perform better when the markets return to normalcy.

  • High Dividend Yield Stock

In the current markets, the high dividend paying stocks have seen a significant downfall. One approach that you may follow as a long term investor is to keep investing in the stocks that have a high dividend yield. Stocks that can give high dividends are a good addition to the portfolio. What you can do now is make a list of stocks that have given consistent returns over the past few years. When the price of these shares falls, you can systematically invest in these companies.

  • Make A Strategy

The best approach to enter a market when it is hit by volatility is with a strategy. As an investor in the market, you can develop your own systematic strategy and invest accordingly. With a strategy, you would be able to invest at different bottoms of the market and hold the stock at an attractive average price.

  • Diversify

When the market is continuously falling and going through extreme volatility, it is the right time not only to invest but to diversify your portfolio too. Diversification minimizes your losses and helps you make higher returns in the long run. Diversification involves investing in stocks of different companies belonging to different sectors.

The above are a few of the points to keep in mind while investing in the COVID-19 hit market. If you are a beginner in the market or want to learn about it in detail, you can visit Trading Fuel. We are the leader in providing stock market education. The blogs and articles are free of cost and comprise of the latest information. By learning about the stock market through our page, you can not only become a successful investor but also become a professional intraday trader as well. We hope that you like our blog of “How to Invest During COVID-19 PHASE in Stock Market” Enjoy!

Author

Prashant Raut is a successful professional stock market trader. He is an expert in understanding and analyzing technical charts. With his 8 years of experience and expertise, he delivers webinars on stock market concepts. He also bags the ‘Golden Book of World Record’ for having the highest number of people attending his webinar on share trading.