Every couple of weeks, we ask experts to give us their different perspectives on money. Today, co-founder of Money Medics, Eve Obasuyi, gives us her views on investing during Covid-19. 💸

Disclaimer: all investments carry some risk - they can go down as well as up! Remember you may get back less than what you invested and past performance is not a guide for future performance. Take your time to learn about the process and invest when and if you’re ready 🙂.

The 2008 Market Crash vs. The Pandemic Market Crash

You’ve probably noticed that the stock markets have been going crazy around the world thanks to the coronavirus pandemic. The last time something like this happened was the 2008 financial crisis. I’m not sure what you were doing then, but I remember studying for my A-levels and not having a clue what was going on. It is safe to assume, then, that if the markets are flashing red, it may not be the best time to invest. But, in the world of investing, this is seen as a big shopping sale for retail investors like you and me. The first question you may be asking yourself is: “what did I miss in the last sale in 2008?”. Fidelity International claimed that if you had put £10,000 in the FTSE All-Share (UK listed stocks) a decade ago, it would have generated a return of 140% - meaning your money would be worth £24,002 after inflation had been taken into account. This shows that the markets always go up in the long term, so, if you're an investor, current market conditions will prove to be advantageous in the long term.

Investing During COVID-19

There have been varying statistics about the negative consequences COVID-19 has already had on women, adding to the upward battle we are already facing. Since we are “more likely to make less money than men", it is hugely important for any woman that hasn't invested before to seize this once in a lifetime opportunity and start investing. If you already invest, resist the temptation to fiddle with your investments. This means you should adopt an investment strategy that you follow during both good and bad times. You should continue to invest no matter what the market conditions are. It is important to note that if you are starting your investment journey, you should take into consideration your risk appetite - ie, whether you will take a more conservative or riskier approach. The reality is that if you are young, you can afford to have a riskier approach, holding more equities than bonds because you have time on your side.

Why It’s Important to Diversify Your investments

You're probably itching to know where exactly to invest your money, but I thought I would touch on one last investing principle to help people avoid making mistakes during this pandemic - eg, putting all their money in Netflix shares! Diversifying your investments helps reduce your risk by holding a wide variety of investments across industries and assets; it essentially means you won't be putting all your eggs in one basket. This helps minimise the risk of your investments dropping in value in the long term.

How to Start Investing Now

First, you need to be confident you won’t need your cash in the short term, and that you’ve set aside 6 months’ worth of expenses for your emergency fund. Actually, make that 9 months because of the level of uncertainty we are currently facing. There is no hard-fast rule on the minimum amount you need to invest - it all depends on your financial goals. I find that setting up a direct debit helps automate the process and reduces the need for me to continuously check my investment accounts. Robo-advisors like Nutmeg, Wealthsimple, and Tickr are great for beginners because they do most of the complex analysis for you, but you must do your research. For further details on other Robo-advisors, Finder has an excellent comparison tool.

🌟 Eve Obasuyi is a Pharmacist and Co-Founder of Money Medics, an infotainment platform that aims to educate millennials on all aspects of personal finance by taking lifestyle approach to growing their money.

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