Your ideal four point Equity investment strategy in times of the deadly Coronavirus (COVID19)

Equity investments are indeed a tough draw for many people. Retail investors are always in a fix to tackle the fluctuating movement in global equity markets. Many of us take inverse decisions when it comes to "timing" the market, i.e. When the markets are going down, we sell and book profits (that is actually a time to buy) and vice-versa.

Especially now in 2020, since the dawn of the new decade, the deadly COVID19 (i.e. erstwhile Coronavirus) has spread across the world like peanut butter on bread. Global supply chains are disrupted, portfolios are smashed out of shape, equity and other markets across the world are jittery, etc.

Following points will guide you through a strategy to tackle your hard-earned equity investments in times of COVID19:

• DON'T PANIC SELL: Do not sell with the adrenaline pumping through the markets. The bearish outlook is temporary and by April-end, this sentiment will change as we progress towards a more stable global outlook. For the moment, HOLD ON.
• Look for value buying: This is an ideal time for some quick cherry-picking. Look out for value investing stocks that have corrected over 15-20% in the last two months. This might be a great time to buy some of the otherwise higher priced possessions.
• Don't play short-term: If you are a short term trader, then you will be short-changed in these times. Your blood pressure should not run parallel to the market sentiment. And that is exactly what happens in such times with short-term trades or other punts.
• Non-cyclical and monopoly businesses: Look around for stable businesses with clean accounting practices and a constantly growing ROE and ROCE over the past two decades. There will be only a few companies that will pass these two filters. Hence, your "buy" call becomes a lot easier. Please do read the book "Common Stocks, Uncommon Profits" by Phil Fisher to understand the fundamentals better and take an informed decision.

SAK's bottom line: Historically, equity investments are subject to markets risks. However, to draw an analogy, they are just like a ping pong ball. The more they go down, the stronger they bounce back !