Question

Knowing the widespread effect of the COVID 19 pandemic, where would you rather invest your money today: Equity or Real estate?

Answer 1

The financial crisis and the recession that followed is still fresh in the memories of many investors. People saw their portfolios lose 30% or more of their values, and older workers saw their plans and the drop to levels that threatened their plans for retirement. Instead of acting rationally during severe markets, many people tend to overreact and make matters worse. However, while many people panicked or were forced to sell assets at low prices, a small group of patients, methodical investors saw the stock market collapse as an opportunity.

Investing in a crisis is no doubt risky, for the timeline and scope of a recovery is uncertain at best

Taking Advantage of a Crisis

While most investors are panicking as asset prices plummet, those with a cool head are able to see the resulting low prices as a buying opportunity. Buying assets from those restless individuals driven by fear is like buying them on sale. Often, fear drives asset prices well below their fundamental or intrinsic values, rewarding patient investors who allow prices to revert to their expected levels. Profiting from investing in a crisis requires discipline, patience, and, of course, enough wealth in liquid assets available to make opportunistic purchases.

Betting on a Crisis to Happen

Another way to make money on a crisis is to bet that one will happen. selling stocks or short equity is one way to profit from a bear market. A short seller borrows shares that they don't already own in order to sell them and, hopefully, buy them back at a lower price. Another way to monetize a down market is to use options strategies, such as buying which gain in value as the market falls, or by selling which will expire to a price of zero if they expire out of the money. Similar strategies can be employed in bond and commodity market.

9 steps to protect your finances against recession in the economy

1. Don’t stop SIPs now

2. Opt for less volatile funds

Opt for less volatile funds
Some hybrid funds have effectively cushioned the market downside.

3. Avoid investing in property

5. Create an emergency corpus

6. Reduce discretionary spends