Educated Investment Gambling During Coronavirus Lockdown
Published / Last Updated on 29/04/2020
Review your pensions and investment cash holdings during the lockdown period.
We have already seen stock markets shoot up with some very weak news on a treatment for coronavirus Covid-19 this week. We then also saw stock markets tumble with news of dividends cuts as big companies are unable to make any profit.
Now, imagine that they find a treatment to help infected people fight the virus and/or a vaccine. If the markets went up 2.5% just on a shortening of the infection period to 10 days, imagine what will happen to markets with a treatment or cure. People back to work, companies able to trade again. Companies making profits and paying dividends. You can guess what will happen to stock markets.
Now is the time to stop imagining this. Know that this will happen. What this tells us is that eventually stock markets are going to rise.
Look at your pensions, investments and other cash holdings. If your pensions and investments have some cash funds inside them or you have other cash based investments e.g. bank accounts or cash ISAs, are you prepared to take some risk knowing that eventually markets will rise?
Do not be greedy. Think about what money you need to access in the short term, do not gamble this. Think about how much you can afford to lose. Think about if you have cash holdings that you are not going to need for at least the next year or two.
Educated Gambling
You are likely to earn very little in the form of interest or growth on some cash funds given that interest rates are barely above zero %. They are low risk, safe and secure but is it worth exposing some more cash to stock market linked investment? Only you can decide but treat it as ‘educated gambling’ if you do decide to take action.
