Question

introduction for invest on stock these days with the covid-19 problem in the world and which porfolio strategies i should use?

Answer 1

Amid the fears of contagion due to pandemic Covid 19, An Investor needs to be very active and hence adopting for active portfolio strategies .

There is a high level of Volatility in the market and to counter that an investor needs to be very active in management of his portfolio.

There is a widespread speculation and the derivatives markets are on a high as volatility is back and margin calls are getting triggered due to the ferocious downside of the index.

In such scenarios, an investor needs to be high on cash and get highly liquid to ride such wild swings because the cumulative returns of years are wiped out in few weeks of wild downside.

In such scenarios, Investor should be aware of the risk tolerance as well the potential risk exposures and he must hedge his positions because one wrong move can wipe out not just the returns but can also lead to reduction in the capital.

So, Active investment strategy is highly advisable to deal with such wild movements in stocks as well as indices as there is a very high level of volatility due to growing uncertainty amid fears of pandemic.