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How to keep money safe in the face of the coronavirus market panic




Stock markets were hit hard last week and they look ready for another volatile week ahead as the implications of an escalating coronavirus epidemic and falling oil prices have frightened Investors.

The downturn marked a dark period for those who have a toe in the market and has sparked anxiety, especially among new investors, who have been betting on market twists in recent years.

However, it is important to remember that this is not the first and that it will not be the last drop in the market, and this can be a good opportunity to monitor your investment strategy.

CNBC Make It met with financial experts for their best advice on managing your investments in the context of the coronavirus downturn and beyond.

Coronavirus in context

"While some epidemics have triggered a market correction, which we are currently witnessing, their effects have tended to be short-lived, with decreases of less than two months. The HIV / AIDS pandemic in 1981 was there "Exception with 5.1 months of market impact," Lim told CNBC Make It.

Steve Brice, chief investment strategist at Standard Chartered Private Bank, was more neutral, noting that many markets have already faced a recession. However, he added that it could provide investors with an "opportunity to add exposure rather than panic and sell".

What to do with your money

Looking for opportunities to earn money in times of uncertainty, Brice said it is essential to remember the basic investment strategies: go gradually and diversify.

"Market volatility is something that investors need to be prepared for, despite the recent volatility which is quite extreme," he said. "Start small and make sure that (you) are diversified in the main asset classes (stocks, bonds, cash and gold) and in the main regions / sectors."

Lorna Tan, head of financial planning literacy at Singapore multinational bank DBS, agreed that periods of volatility can be a good time to go public and assess your risk tolerance.

However, she added that it was not for shy people and recommended following four key pillars.

1. Invest for the long term Make sure you have a three to six month salary saved in cash for a rainy day, as any money you invest in the market must be locked up for long term goals.

2. Contribute graduallyRegularly invest a fixed sum in the same investment product over a long period. This allows you to buy more units when the cost is low and less when the price is high. It is a strategy known as the average dollar cost.

3. Take advantage of compound interest The time spent in the market is more important than the timing of the market. Earn interest on the interest you receive by following a disciplined investment plan.

4. Diversify, diversify, diversify Consider low-cost passive index funds or exchange-traded funds (ETFs), which offer you exposure to a wide range of stocks.

Lim noted that the current market downturn may offer a particularly attractive opportunity for young investors who have a long term to play with. According toStashAway & # 39; s Insights 2020In contrast, people who invested consistently during corrections and when markets broke out performed better than those who pulled out during corrections and did nothing during periods of equilibrium.

Meanwhile, those who already have a stake in the market should hold on, according to Dhruv Arora, CEO of digital wealth manager Syfe.

"Times like these test not only the market, but also individuals … Try not to be swayed by your emotions. Unless you have an immediate need for money, don't sell your assets by panic, "he advised.

Long-term prospects

While financial experts expect the slowdown to continue in the near term, most have agreed that markets will recover in the coming months.

"History has shown that markets have rebounded repeatedly," said Tan of DBS.

Lim agreed, noting that the underlying economic indicators in the United States and China are solid, and that recent events should "delay but not derail" this growth.

China, in particular, has shown positive signs of recovery, having seen a decline in the number of new virus cases in recent days, he said. Meanwhile, governments elsewhere, including the United States, have implemented proactive tax measures to support their economies.

Do not miss:Investing in this market could be a big risk, say financial experts

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