The Best Investment Right Now

Proguy
2022-03-13

The Best Investment During a Stock Market Crash

So far, 2021 has not been a good year for stocks. Global equity indices have suffered heavy drawdowns on fears of high inflation driven by the Russia-Ukraine Crisis. During this period of extreme volatility and uncertainty, you might feel discouraged from the losses suffered in your investment portfolio. Or you might feel lost, wondering what to invest in, as stocks from all types of sectors and regions continue to be badly hit by the market selloff. However, instead of focusing on the negative aspects and volatility that come with investing, it is important to take a long-term perspective and focus on developing yourself by learning from your past mistakes. Therefore, the best investment you can make right is to invest in yourself! In the following sections, I will describe how one can use this opportunity to emerge from the recent market correction psychologically stronger and a better investor.

Invest in your education

As a human being, your most important resource is your brain. By developing and learning new skills, you will be able to help to resolve problems in society in exchange for salaries, wages and commissions. The higher your education level or the more skills you have, the more complex the problems you will be able to resolve and the higher you will be paid. Therefore, it is important for one to constantly upskill themselves to become more attractive to employers and potentially earn a higher stream of income. With this monetary raise, you will be able to continue investing in the stock market with an even larger investable base which can help you achieve your financial goals even faster. Instead of getting discouraged by your current investment losses, you can use this as a motivation to work on yourself and work on your financial goals!

Another investment in education one can make is to learn trading and hedging to profit from market volatility. As we have recognised by now and according to the law of physics, 'what goes up must come down'. During periods of irrational exuberance, markets may rally strongly but there is bound to be a period of correction as we are experiencing now. By learning to trade and hedge your portfolio, you will be able to profit even during downturns in the market. You can then reinvest these profits into your long-biased investments at a lower cost basis. As the markets return an average annual return of 10%, it is important to stay invested during this period as it tends to lead to higher returns in the future!

Invest in your side-hustle

The transition to a hybrid work model has given many people more time to pursue their passions and interests. Being able to monetise your interests into a side-hustle could be a great opportunity for you to earn an extra stream of income that can be reinvested in the future. For example, if you like teaching math or English you could become a tuition teacher for children. Alternatively, if you possess strong IT and coding skills, you will be able to find a lot of freelance jobs online. By building up your side-hustle, you will be creating a brand for yourself that can pay dividends in the future. If you are good and are in high demand, you will be able to quit your day job, following in the path of many successful entrepreneurs.

Invest in your mental well-being

There is a saying, "life is a marathon, not a sprint. What matters is how you finish not how you start." Despite making mistakes in your life or investment journey, there is a high probability that you will be able to recover from these mistakes. By experiencing failure, you will be able to build your resilience and mental fortitude and emerge from this crisis even stronger than before. Therefore, it is always good to reflect on your mistakes and find out how you can improve in the future. It is good to keep an investment journal detailing your investment thesis so that you can come back to this when evaluating what went right or wrong with your investments. By learning from your mistakes, you will become a wiser investor and avoid repeating the same mistakes in the future.

Another aspect of working on your mental health is by exercising and taking good care of your health. Only with a healthy body can you have a healthy mind! This is especially applicable during this pandemic where it is important to have good physical health to avoid falling sick. By investing in a gym membership, you will be able to train and develop your body as well as feel much better about yourself. Focusing on yourself instead of others is an important philosophy is also applicable to investing as everybody has different financial goals. Therefore, you should not compare your investments to others and instead focus on achieving your own financial goals!

Conclusion

During this time, it is easy to feel discouraged and demotivated as your portfolio bleeds losses during the stock market selloff. However, it is important to take a long-term perspective and focus on developing yourself so that you can emerge even stronger from this crisis. As you are probably still young and have a long investment time horizon, you can afford to make mistakes at this point in time. By investing in yourself, you are setting yourself up for success in the long run!

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