Question

How the COVID-19 Pandemic is affecting the U.S. Capital Markets? Should You Invest New Money During the Coronavirus Pandemic?

Answer 1

If you have a stable financial base in place, now might well be a perfect time to invest in companies that look like they can survive this recession and emerge stronger on the other side. You need to have the base in place because you don't want to rely on selling those stocks to help you cover the immediate expenses if you lose your job in the next round of layoffs. Being forced to sell is a formula to lose money in a down-market if you need the money.

Which doesn't mean that you have to be completely clean of debt. This does mean that the debt you have will be at a low interest rate, have low income payments and have a good function for the future. When your debts don't possess all those characteristics, you can first concentrate on snowballing them down, then consider saving.

You can only invest the money you have after paying all your bills — both the expected ones and the surprises from time to time that pop up. When you are not in a position to cover those expenses and have more cash in than out, then you are not in a position to spend money. First, get rid of the unnecessary expenses and figure out how to minimize the others, and then think about investing.

As long as the framework is in place during the coronavirus pandemic, you can consider investing new capital. However, what you have to remember is that you should only invest money in stocks that you don't think you'll need for the next five years at least. You can use the long-term emphasis to help you spend smarter in two main ways.

First, the stock market can be incredibly volatile, as we are reminded of in the last few months. A long-term outlook will help you boost the instability of your stomach by helping you isolate yourself from what happens to your finances and what you need to cover your everyday life.