Investment in Recession – The stock market is down 25% from its all-time high. Is it right time to invest in stocks? which sector industry to buy? or are markets going to fall more?. I will answer all your questions regarding ‘Investment in the stock market during the recession’.
Before you start investing during the Recession (pandemic crisis) you must understand this is the most difficult time for us to survive. First thing you should do is keep yourself safe, that is the biggest investment as of today.
Make sure you have enough cash available with you for the next six month. This isn’t doing to end at least for the next few months. No one can exactly predict the time frame for a vaccine, this is so much unprecedented.
So, it is important to have cash in hand to meet your basic needs. After that, you pay the debt or EMI dues if possible apply for a moratorium. A moratorium is the last option if you are facing cash crunch, to know more on moratorium read my article here.
After having cash aside and bills and debts paid if you are left with some funds which are not an immediate need, then you can invest in the market.
All the industries which need the physical presence to operate are suffering from the shock of lockdown. The airline sector is bleeding around the world. We also witnessed Warren Buffet selling airline stocks.
Where companies following WFH (Work From Home) model can see less impact on their operations due to the lockdown. We may not see a negative impact on the IT sector due to lockdown.
TOP 5 STOCKS TO INVEST DURING PANDEMIC CRISIS.
Tyres sector is the most affected sector due to lockdown. But all our vehicles need replacement of tyres and demand for tyre will be constant irrespective of automobiles sales slow down.
We may see slow in FY 2020 but it will eventually recover irrespective of auto demand and pandemic crisis. JK tyre, Apollo Tyre and CEAT are good bet for long term.
Yes, Real Estate Sector will bounce back once the crisis is over. We have seen slowdown in real estate sector due to Demonetization and RERA act. And slowdown will continue for until next year. But when the interest rate will be at all-time low it will encourage buyers to invest in real estate sector. The major concern is the inventory of the unit which are not sold. But sooner we will see a huge demand in this sector. DLF and India Bull Real Estate is the good bet.
If I want to choose the best stocks from food and packaging sector than ITC and Dabur India is my favourite. Pandemic has stopped the consumption and production sector which lead to increase in demand and lower supply. When the effect of pandemic crisis will be over, this sector will be in high demand to meet the needs of the consumers.
This is the another sector which has affected due to lock down but will bounce once this crisis is over. But given the uncertain outlook for the market amid looming economic uncertainties every investor should go for long term. Another reason to buy this sector is the falling crude oil prices as crude and crude derivatives account for 60% of cost of capital for paint companies.
Ultratech and Ambuja cement are top pick from this sector. This sector will come back into play but will need more time to come on track. This sector is directly dependent on the real estate sector. Cement sector should be only 10% of your total portfolio.
Do not expect all above sector will bounce in a year or two. Some may recover fast but we must understand how much painful is economy all over the world. If you are planning to invest for short term and expecting higher returns than this is not the right place. When the pandemic crisis will be over economy may need more time to heal.
STAY HOME STAY SAFE .