And it happened again… History repeats one more time. After around 12 years of relative economic prosperity world is on the verge of economic collapse again. In 2008 we had collapse of Lehman Brothers US investment bank. In 2020 global stocks crash is caused by coronavirus pandemic which at first occured only in China. With half of Europe currently under lockdown and virus spreading mainly in Europe, panic grows and losses deepens. It seems like the worst time to invest. Is it though? There is old saying “buy when there’s blood in the streets“. Is it “enough blood on the streets” right now? Here is how I can see that!
3 possible investment opportunities during and after coronavirus pandemic
1. European stocks, ETFs, stocks focused mutual funds
If you were lucky or smart enough to take your money before stocks collapsed, you may be now in good position to invest in stocks. “May” as nobody knows what will happen next. However, considering how prices as for today (18th March of 2020) compares to end of 3rd quarter of 2009, it can be profitable to invest now in stocks or simply in FTSE 100 index. At least short term because this market seems to be heavily oversold now. In a very short time stocks indexes across Europe dived below levels way below levels last seen in 2008 and even 2000! Scale of panic in such short time frame is unprecedented so I assume bounce may be in cards soon. All European indexes drops similarly so please consider FTSE index just as an example.
2. Crude oil
Just a few weeks ago many investors eyes were on WTI Crude Oil whether it will keep above $40 per barrel. It’s being said that It’s worth to mention that even that level was considered below average considering recent history. Just after Saudi Arabia launches price launched oil price war, global oil prices dived below $30 price mark unseen for many years. Now, just 10 days after, we are approaching 20$. Due to coronavirus pandemic demand is currently indeed lower but such big price collapse is way too serious. I expect OPEC+ to come to some agreement soon or other approach/event so WTI Crude Oil should bounce back to $30-40 in next few months. Around $20 companies are just unprofitable extracting oil.
3. Bitcoin and Gold
This will be controversial. Those who are big fans of Bitcoin are usually enemies of Gold. And vice versa. However, many consider both as a store of value. While Gold is indeed relatively stable, it’s hard to tell the same about Bitcoin. Just before biggest global stocks sell-off in March, Bitcoin collapsed and hit $3800 per coin. Now it’s relatively stable just below $6000 and rising. In my opinion crash to $3800 could be the bottom and we may never see such low price anytime in the future. Will it again rise above ATH (all time high) above $20 000? I think it’s indeed in cards. If it comes to Bitcoin, it’s historically way higher compared to Bitcoin (around $1500 now). However, reason of existence of gold in financial markets is quite similar to Bitcoin. The thing is we know golf for hundred of years and Bitcoin is just 11 years old.
Are those investments long-term or short-term for coronavirus pandemic?
If it comes to stocks, definitely short-term. I expect bounce back as markets are oversold and panic driven. It’s hard to say for oil and I’m quite bullish for gold and even more bullish for Bitcoin. However, I see 2021 as a year of recession. 2022 might be the same. Problems which arise before 2008-2009 haven’t been really solved. Most Western European countries and USA are in huge debts. More and more QE programs delay the inevitable. If coronavirus pandemic disappear until summer holidays 2020, I’m quite sure markets will bounce back but I doubt we will see new highs anywhere in the world. However, President Trump will do all he can to be re-elected so QE programs, 0% interest rates and maybe other monetary programs will help him to achieve it. Be save and do not invest more than you can afford to lose (at least temporary). Always have emergency funds in bank and keep some cash at home. Good luck!
Please let me know in comments whether you agree with me or have completely different ideas what might be good investment during coronavirus pandemic!
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Please keep on mind that I’m NOT a financial adviser. You shouldn’t treat above post as any kind of financial advice. This is just my blog where I share my knowledge but I can be wrong while doing so! Also please remember that any financial decision you will make might affect your finances either positively or negatively. Your capital is always at risk when you invest. You should always read T&C (Terms and Conditions) to make sure you know all the rules.