This COVID-19 pandemic has created a great financial reset of all time, the market has grown dim and it is a defining moment for investors to change their perspective on investments. Since the inception of the pandemic, more and more investors around the globe have been putting a brake on their investments and going on the safe side.
It's time for you to diversify. What is diversification? Well, it's holding a broad basket of stocks to insulate you from the ups and downs of the market. So how can you do this? Well, one option is to spread to different stocks, buy low-cost exchange-traded funds, or ETFs, or mutual fund products, and thus own the market as a whole.
However, no matter how well stocks do over time, they are still a risky investment. And you as an investor need to be sure that you can handle the risk before you ever invest in stocks. In order to mitigate your risk, or at least to help mitigate your risk, you need to diversify.
Spread to different stocks
You will get so emotional when it comes to spreading your portfolio in a more sustainable way. The best way to spread stocks is to look for the potential capabilities of other stocks. Equity and Index might be a good option according to your risk appetite. However, due to the massive loss of money due to pandemic it might be good for you to consider bonds or balance to secure your money while we wait to recuperate the market during this time.
If you have traded using FOREX or you have opened accounts through a foreign platform you might want to consider the below stocks to check the fundamental capacity.
| Best Value Stocks Ofshore | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing P/E Ratio | |
| UWM Holdings Corp. (UWMC) | 6.90 | 0.7 | 1.2 |
| Qurate Retail Inc. (QRTEA) | 10.35 | 4.2 | 3.1 |
| Sage Therapeutics Inc. (SAGE) | 44.35 | 2.6 | 3.5 |
| Athene Holding Ltd. (ATH) | 66.37 | 12.7 | 3.6 |
| Annaly Capital Management Inc. (NLY) | 8.86 | 12.8 | 3.9 |
Source: YCharts
According to Investing.com here are the top picks for the stocks that you can diversify in October 2021.
| Last | High | Low | Chg. | Chg. % | Vol. | Time | |||
|---|---|---|---|---|---|---|---|---|---|
| 12.840 | 12.900 | 12.480 | -0.000 | 0.00% | 18.63M | 11/10 | |||
| 3,080.00 | 3,134.00 | 3,002.00 | 0.00 | 0% | 104.97K | 11/10 | |||
| 208.40 | 212.40 | 205.40 | 0.00 | 0% | 381.41K | 11/10 | |||
| 5.4800 | 5.4900 | 5.3800 | -0.0000 | 0.00% | 3.78M | 11/10 | |||
| 6.310 | 6.400 | 6.300 | 0.000 | 0% | 506.10K | 11/10 | |||
| 36.00 | 36.55 | 32.50 | 0.00 | 0% | 33.12M | 11/10 | |||
| 0.3300 | 0.3400 | 0.3250 | -0.0000 | 0.00% | 16.42M | 11/10 | |||
| 49.10 | 49.25 | 46.50 | 0.00 | 0% | 7.28M | 11/10 | |||
| 820.00 | 822.00 | 804.50 | 0.00 | 0% | 186.69K | 11/10 | |||
| 47.750 | 47.950 | 46.750 | 0.000 | 0% | 674.20K | 11/10 | |||
| 30.80 | 31.25 | 29.75 | 0.00 | 0% | 9.66M | 11/10 | |||
| 61.900 | 63.000 | 61.700 | -0.000 | 0.00% | 462.32K | 11/10 | |||
| 30.400 | 33.000 | 29.800 | 0.000 | 0% | 29.73M | 11/10 | |||
| 40.00 | 40.00 | 39.85 | 0.00 | 0% | 515.90K | 11/10 | |||
| 16.240 | 16.300 | 15.480 | 0.000 | 0% | 820.60K | 11/10 | |||
| 0.5900 | 0.6300 | 0.5900 | 0.0000 | 0% | 29.00M | 11/10 | |||
| 185.000 | 188.300 | 185.000 | 0.000 | 0% | 2.48M | 11/10 | |||
| 7.5100 | 7.5700 | 7.3000 | -0.0000 | 0.00% | 6.55M | 11/10 | |||
| 3.020 | 3.060 | 2.900 | 0.000 | 0% | 36.19M | 11/10 | |||
| 2.2400 | 2.3400 | 2.1700 | -0.0000 | 0.00% | 6.94M | 11/10 | |||
| 219.00 | 222.80 | 219.00 | 0.00 | 0% | 3.16K | 11/10 | |||
| 25.45 | 26.10 | 24.80 | -0.00 | 0.00% | 4.76M | 11/10 | |||
| 116.90 | 117.60 | 115.70 | +1.30 | +1.12% | 506.45K | 12:12:00 | |||
| 35.150 | 35.200 | 33.500 | -0.000 | 0.00% | 6.74M | 11/10 | |||
| 9.600 | 9.690 | 9.250 | -0.000 | 0.00% | 3.67M | 11/10 | |||
| 135.00 | 136.00 | 131.10 | 0.00 | 0% | 491.10K | 11/10 | |||
| 0.520 | 0.530 | 0.510 | 0.000 | 0% | 520.00K | 11/10 | |||
| 3.650 | 3.680 | 3.630 | +0.060 | +1.67% | 1.65M | 12:12:00 | |||
| 15.800 | 15.860 | 14.840 | -0.000 | 0.00% | 4.49M | 11/10 | |||
| 18.320 | 18.400 | 18.060 | 0.000 | 0% | 3.38M | 11/10 |
That's where the risk in stock picking comes in. If you miss out on these superstars, your returns are going to be well below average. For that reason, it's often a good idea for beginner investors like you to make sure you have a diversified investment portfolio.
Strengthen your portfolio
Building a lasting portfolio is the key to an overcome risk during this pandemic. I have seen the trend of the market during this time since almost all of the big businesses closed at the onset of COVID-19 last 2020. We also have cried over the collapse and bankruptcies of major businesses worldwide. Selecting the blue-chips stocks which has an excellent reputation can save you from regrets. This is helpful to consider but as always build a portfolio that has varying funds from services, manufacturing, health care can
Consider the following stocks from moneynews:
1. Johnson & Johnson (ticker: JNJ) - Healthcare
2. Berkshire Hathaway Inc. (BRK.B) - Warren Buffet
3. JPMorgan Chase & Co. (JPM) - worth about $470 billion
4. 3M Co. (MMM) - worth of $110 billion
5. AbbVie Inc. (ABBV) - worth $200 billion
6. The Walt Disney Co. (DIS) - 173 million subscribers
7. AT&T Inc. (T) - pays a 7.5% dividend
8. The Procter & Gamble Co. (PG) - worth $350 billion
9. Lowe's Cos. Inc. (LOW) - YTD returns: +31.1%
10. Cigna Corp. (CI) - worth $70 billion
Think about it this way. Diversifying does not make you earn a lot, it only make sure that at the end of the trading you are still on the winning side at least when all else comes to worse. I've been keeping my Philippine blue chips for over 2 years now and I have traded some of those and diversify the major once but as of this time, the market has not gone green and I am still at a loss for most of them. But I am confident that the more we put money on stocks no matter what happens even if we have a paper loss we are still expectant that this will grow sooner.
Keep an eye on your commissions
I've said this over and over, let's go back to your risk appetite in investing, if you cant keep your money and you are emotionally unstable get it out. What I mean to say is check and set your threshold, you have to study yourself on how high or low you can stay on a bet so that you keep winning in the end. Once you have reached how high the profit of stock or funds then sell it. Or vice-versa, if you have to reach how low the loss of stock then get it. The key here is to be comfortable holding your stocks for the long term so that you can try to take advantage of the superstar effect that is so important to returns. When you understand the value of diversification, you're on the road to building a more secure and profitable long-term financial future so that you can maximize your investment during the lockdown.
Jack speaks at conferences across the Philippines on topics such as family finances, and personal and professional growth.
You can contact Jack Marbida through his social media accounts or email him at papajackph@gmail.com.
Cheers!
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