by Jacques Poujade
Many investors across the world are wondering the same thing right now: should you buy or sell during uncertain times? Indeed, times are very uncertain right now, and the global economy has taken a major hit. Not only is there widespread economic impact from the coronavirus pandemic, but the effects are also waxing and waning. For example, the stock market has been tumultuous, and has seen some massive plunges, but it has also made some small recoveries. So the question is, should you buy or sell? I want to walk you through some of the advantages and disadvantages, in a new strategy for 2020.
Firstly, it depends on what we’re talking about here.
What are you thinking of buying or selling? Is it a home, a car, or stock? Maybe some other financial asset you’re debating offloading or purchasing? All of these matters should be looked at individually, and of course, I recommend you take a close look at your finances and individual situation before making any rash decisions. Also do plenty of research into the specific area of asset you’re working with.
Markets are seeing a lot of uncertainty
In general, the markets have been very volatile. For stocks, you may have noticed that your investments have lost value. If you’re suffering economically from the global pandemic, you may need to have some of those assets as liquid cash, despite them losing value. If it’s your only solution to putting food on the table, for example, this may be your most realistic option. But if you’re able to keep your money in the game, do it at nearly all costs. It’s very likely at some point the stock market will rally once again, and your investments could regain value. Also, if you’re looking to hold onto your stocks, maybe avoid checking them everyday. During uncertain times, it can be depressing and difficult to watch them fluctuate in value.
Mortgage rates are low
For those looking to buy or refinance a home, mortgage rates are actually very low right now. This is excellent, except there is another issue at hand: mortgages services are currently inundated with requests, as the federal stimulus package offers borrowers with federally-backed mortgages the option to delay payments. Many mortgage providers are busy fielding many of these requests, so it could be a challenging time to work with a lending institution. That being said, if you’re in a good place to buy or refinance, it may be worth the effort.
All in all
If you’re debating buying or selling during uncertain times, know that you’re taking a risk. It could be a worthy risk, for example, if you get a mortgage with a low interest rate. But if you pull your stocks out now, it’s very likely you’ll lose money on your investments. Your individual financial situation plays a big role here, and also, how much risk you’re willing to take. If you’re considering buying a home, I recently wrote about five things you should consider. Plus, I recently spoke about several things you should consider before buying your first rental property.
If you want the latest news about trends in the world of real estate, check out my Medium Blog at https://medium.com/@jacquespoujadelendplus.