Although it is natural for you to be worried about your various investments at this time, it is also critical that you to keep your goals at the forefront of your mind, Delories Jones, senior vice president, sales strategy at JN Fund Managers advises.
“When you started to invest, originally you had a goal, and that goal remains, so keep on track. Remember why you started investing in the first place, because post-COVID-19, you will still want to achieve certain things; hence, you must stay the course,” Mrs Jones advised.
She shared her advice during the JN Bank Redesigning Your 2020 Goals, online series recently. The social media series, which will run until July 23, promotes practical conversations on how Jamaicans can maintain or adjust their financial plans based on the impact of the COVID-19 pandemic.
Here’s Mrs Jones’ advice:
- Have a conversation with your advisor
The JN Fund Mangers’ senior vice president noted that what persons may need to do is to start a conversation with their financial advisors to examine what they’re now investing in and determine if they may need to realign their portfolios to deal with the changes.
“First, you may want to examine your goals, as in short, medium or long-term. You should also look at your present circumstances. What is happening in your financial life? If your goal is medium or long-term, then your best bet is to hold strain. It does not make sense for you to jump ship now. You probably only need to reorganise your finances,” Mrs Jones advised.
“Also try not to watch the market every day and worry about it.”
- Consider making changes to your portfolio
She noted that investors with short-term goals may need to consider making some changes to their portfolios.
“Depending on your finances and considering COVID-19, there may be several things that you will want to look at differently. Because, if the market is going to be down for a little while, you may want to cash in some of your investments and make some profit, whilst you have it, so that your plans to achieve your goals aren’t further eroded. This means that you may also have to delay the goal which you had in mind, if it’s a goal you can delay,” Mrs Jones advised.
- Look at your budget
She noted that persons may also consider if it is time to revamp their budget, to ensure that they still have funds, which they can put towards their investment goal.
Mrs Jones added that investors may also consider moving some of their investments into low-risk plans.
- Have an emergency fund
The JN Fund Managers senior vice president also noted that one of the first rules of investing is to put an emergency fund in place.
“If it’s a situation where you no longer have a job, the important thing as an investor, is to ensure you have an emergency fund in place,” she advised.
“Therefore, although you may be out of a job now, your investment plans would not get railroaded, because you would have your emergency fund to fall back on. That ensures your liquidity if the need should arise,” she explained.
- If you can, take advantage of what’s happening in the market
Mrs Jones further noted that persons whose financial circumstances allow it, may also consider taking advantage of what is happening in the market.
“Because history has shown that, even when markets go down, they rebound. There are opportunities in the market now, which you do not want to miss, at this low. The herd mentally is that people buy when everyone else is buying and that is when it is high. When you look at the current stock market, or even the bonds market, there are opportunities for you to buy low, therefore, if you’re able to buy, now is a good time,” Mrs Jones advised.
- Look out for ‘golden opportunities’
She further recommended persons to consider bonds or stock market for golden investment opportunities.
“There are many companies, which based on COVID-19 and its effects, have seen their stock prices decrease by about 30 per cent. However, despite that, a lot of the fundamentals of these companies remain the same. Therefore, once there is a break, you will see those companies rebounding. And, those are some of the opportunities that you can take advantage of, if you are in the right position.”
- Be conscious of your risk tolerance
Mrs Jones also pointed out that investors must understand that they should be guided by their risk tolerance, when making decisions about investing in such a market.
“Also, keep in mind that, investing in the stock market is not for the short-term, because it is a long-term event,” she affirmed.