How To Invest In the South African Stock Market During The Pandemic By Jerry Mononela
Investing your hard-earned money is a risk that is scary in normal life, but much more so in a global onset of a killer disease. The Coronavirus has impacted businesses and companies both huge and tiny alike. A lot of people have lost their jobs and large corporations are undergoing downsizing. So where do you stand in such a volatile market, a person looking to invest their savings, hoping to get a decent return?
Naturally, the first thought that would come to your mind in the yesteryears of Corona would be to invest your money in various firms that have comparatively low risk and higher return rates, right? Well, what if I told you that the same thought process is still valid in a pandemic?
Some of the most common mistakes that people make while investing are:
Not knowing enough about the industry they want to be involved in.
Not assorting their investments properly.
Not assorting their investments at all.
So the first thing you have got to learn is the market you want to invest in. You have got to have enough information about the firms you want to invest in, their past performance, their plans, and the return that other investors have got in the past. You would be surprised to know how much a little amount of research can do for you!
The next thing you have to do is to assort your investments. ‘Don’t keep all your eggs in one basket’ is an age-old phrase for a reason. But just randomly investing in different ‘baskets’ won’t amount to anything. Smart investments are what will make you money and then some. One common example would be to not invest in a similar stock. You would think that you are playing it safe but it’s quite the opposite.
When you look at the bigger picture, you’d realize that investing in similar stock would increase the chances of you losing your money as your investment wouldn’t help any company in particular. This would mean that the only way your stock in any one company going up would be on a fluke. And you don’t want to invest your money on a fluke; a risk, yes but not a fluke.
But all of this doesn’t matter if you don’t know where to invest your money. So in this post, I’d like to inform you about some industries that are thriving despite the pandemic and how you can place a safe bet on any of them.
It is no surprise that online businesses have not been affected by the Coronavirus but are booming due to people now ordering most of their stuff online. Even if we disregard that change, online businesses are businesses that don’t get affected by the lockdown or social distancing as most of their products or services are delivered through the internet. So investing in online businesses during a pandemic would be a strategic decision as these businesses will continue to thrive even after things normalize.
But as is with every type of stock, stock of online companies also comes with risks. Server collapses, hacker attacks are only some of the things that can bring an online business down. So as mentioned earlier, do your research and invest in the company that you think would yield the maximum benefits with lower risks.
It is of no surprise that delivery and subscription-based businesses are booming in the pandemic in which every place is enforcing social distancing. People want to have less and less contact with objects that change hands. That’s why investing in a local delivery business or an online subscription-based business would be a smart decision to get a quick return from your sum.
But while investing your hard-earned savings, you should also consider longevity. Delivery and other subscription-based businesses will bloom in the pandemic and will continue to do so long after the situation comes under the control as people will get accustomed to convenience. The factor of convenience plays a major role in online businesses that more and more people are experiencing in the lockdown. This will make a large chunk of the user base recurring customers and ultimately yield more profit for the company.
But all of this depends differently on different types of services that a business offers. Groceries and essentials deliveries are popular now but would decline when there is no need for social distancing in the slightly distant future. So do take your time and research about subscription and online businesses booming in the pandemic and invest accordingly.
The one thing that is considered non-essential by most people but is one of the most essential businesses of all humankind is the entertainment business. We have seen a content boom because of the pandemic and more and more companies are on the look for content that can be published online.
Content creation comes under various forms whether it be blogging, making videos for YouTube, or marketing on Instagram. But the most important thing about content creation is that everyone needs content. Businesses needed content and online marketing before and they need it now much more than ever. Investing in an online marketing company would be a sound decision as we move towards a world that is ruled by technology and the internet is the biggest marketplace.
Traditional marketing was steadily being pushed out by online affiliate marketing but the pandemic has made that push that is making online marketing the next big thing. So invest in a company that provides a platform for online marketing to their clients because that is the direction the world is moving in.
All in all, it all depends on what you want to do with your money. If you want longevity, it would be wise to invest in online businesses and content creation as these types of businesses were already moving towards being big but have jumped a big hurdle because of the pandemic.
Delivery businesses would get you a decent return on your investment in a comparatively lower time as they are growing in the pandemic but would slow down as the vaccine rolls out and people start going outdoors.
The most important thing to do would be to do your research and making a well-thought decision. Jumping the gun helps no one, especially while investing in the stock market.
Who is Jerry Mononela?
Jerry Mononela is a freelancer that offers accounting services in the city of Tshwane and has a passion for finance and the stock market!
Jerry Mononela like to write articles on stock marketing investing tips to help out a complete novice in the finance industry. If you liked this blog and found it helpful, check more of my articles here.