The Coronavirus pandemic is spreading fast and for the first time in a while, the world is paralyzed. Economic activity has come to a halt and in a very short period of time, financial markets are experiencing more than 30% collapse in stock value. Airlines are not working and as a result, the petroleum stock prices have fallen below 0. All tourism is on hold and malls are closed. Sound bad? It doesn’t have to be.

You may have heard the phrase, “When life gives you lemons, make lemonade.” Well, here is one way to make lemonade from the current status – investing.

Stock prices are currently low, which leaves us a period of time in which we can invest and earn much more than usual! We can buy low-priced stocks because we believe in the long-term, stocks will return to their previous value, which provides us the possibility of a long-term gain.

To start, let’s review the basics of investing…

What is the meaning of investing?

Investing is defined as the act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit. Unlike consuming, investing earmarks money for the future, hoping that it will grow over time. That being said, investing also comes with the potential risk of losing money.

What is a share?

A stock is an investment. When you purchase a company’s stock, you’re purchasing a small piece of that company, called a share.

Investors purchase stocks in companies they think will go up in value. If that happens, the company’s stock increases in value as well. The stock can then be sold for a profit.

Why invest in a stock exchange?

The stock exchange is not a casino. At the end of the day, the house always wins because casinos are businesses. In the stock exchange, everyone can theoretically make a profit – that is if the market value goes up. There’s no conflict of interests if all the market players earn, and it doesn’t come at the expense of anyone else.

If you look at the indices in your country and abroad you will see that both stock and bond markets are rising. It doesn’t happen every year, there are periods of declines and as we see now there are landslides as well. But overall in the long-term, the market is rising and every moment we are not investing in it we are “losing” money.

Right now your money is just sitting in the bank and isn’t making any profit (no, 0.001% doesn’t count!). Done the right way, investing can “work” for you. So go ahead, make some lemonade.

Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. Nor is the information present intended to be a substituted for professional financial advice.

Tech Team

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