PSEi is down by almost 41% on March 16, 2020, due to the COVID-19 pandemic. Currently, PSEi is moving sideways at the 5300 levels. This might not be as scary to seasoned investors but for most of us, it does. So what should you do with your investment in stocks, mutual fund, UITF, VUL, etc.?
Should you buy, sell, or hold?
That is for sure will entirely depend on the amount of risk you are willing to take. But here are some points you may consider in creating your next step.
Buy More Shares
This is the time to take advantage of the low prices of stocks in PSEi due to COVID-19. It rarely happens so grab your chance to invest in bluechip companies Jollibee, Ayala, Meralco, etc.
You may do this if you are any of the following.
- A young investor in your 20’s, 30’s, or 40’s. This is because the time value of money is still on your side.
- You have liquid funds.
- Peso-cost averaging practitioner
If you’ll buy shares now you may earn as much as 67% from your fresh invested funds once the market bounces back to its previous level.
At this point, your current investments might be experiencing a loss of as much as 41%. You will be actualizing your loss if you sell your position now.
Just sell it if you want to hedge it from losing more. Practically, you are selling it for your peace of mind.
The decision is still yours but you must remain vigilant in watching for the movement of PSEi or else you will be left out.
Hold on to it
If you don’t have a liquid asset to buy more shares then the next best move is to hold it. The decline in stock prices is rather fast and steep so the comeback is short and sweet. The same with the market sentiments during SARS, MERS-CoV, and Swine Flu.
It is expected that PSEi will quickly recover after this pandemic given that it has strong fundamentals.
What should you do?
Remember the famous quote of Warren Buffet? Be fearful when others are greedy and greedy when others are fearful. That’s exactly what experienced investors are doing now. They are leveraging their investment position while others are too busy panicking on what is happening with their investments.
Federico is an electronics engineer, financial blogger, insurance agent, and a certified investment solicitor. A multi-awarded financial advisor with clients ranging from lawyers, doctors, engineers, accountants, business owners, company directors, and OFWs to minimum wage earners had sought advice from him in achieving lifetime financial freedom.