Suggestions on how to invest during the pandemic

November 5, 2020

There’s no question that the pandemic has thrown a wrench into the financial plans of most Canadians.

New research from Manulife, its annual Financial Stress Survey of Canadians, tells us that Canadians are really worried about money.

Stress about money has risen to 27 per cent (it was 11 per cent pre-COVID), the research notes, and 51 per cent reported dipping into emergency funds or even retirement accounts to keep afloat. A whopping 63 per cent said they were now going to seek advice about how to invest, up from 50 per cent last year.

Save with SPP took a look around the Interweb to see what sort of advice people had for jittery investors. We looked for approaches one might follow, and not specific stock tip advice.

Concordia University’s Alumni & Friends publication quotes financial adviser Adrian Chomenko as saying investors need to “relax, stay the course, and try not to predict the future.”

“Bear markets are as common as dirt. We’ve lived through them before and all you’ve got to do is sit through it,” states Chomenko in the article. He is adamant with his clients, the article reports, “that his strategy does not include speculating on the latest investment trends such as cannabis and bitcoin.”

“My strategy is plain vanilla: simple diversification and regular rebalancing,” Chomenko tells the publication.

Writing for the Motley Fool UK blog, Thomas Carr offers these tips – invest in quality, avoid “stricken sectors,” and to look for value.

He writes that many companies will suffer during the pandemic, but “the strongest may survive and prosper. These are companies that have strong brands, pricing power and high profit margins. They’re the household names that we stock in our fridges and the supermarkets that we shop in.”

Stricken sectors to consider avoiding, he writes, include “travel and hospitality in particular… they’ve had months of revenue wiped out, in many cases leading to giant losses.” Losses may continue into the new year, he warns.

Watch for stocks that are “undervalued… and appear cheap.” Carr says that “if the underlying company is of sufficient quality, there’s only so far its share price is likely to fall before its value becomes attractive and its price recovers.”

At Forbes magazine,  Pam Krueger, co-host of the PSB program Moneytrack, says she favours “conservative stocks that pay reliable dividends” as a good bet during the pandemic.

Bonds are often seen as a hedge against volatile stocks, but the article warns that right now, there’s a risk of interest rates rising and bond prices falling, a situation that would make a bet on bonds a money-loser.

“I say: ‘Stay at the shallow end of the pool, the shortest end, with bond funds,” said Krueger. “You don’t want to get too far out on the risk continuum,’” she tells Forbes.

This is a broad topic, but if there’s an overall theme coming through here, it is to be cautious. These experts are warning against radical, rushed changes – don’t let panic impact your thinking. Every crisis has a beginning, but also an end, and this one will eventually play out too.

Investing on your own can be fun, but less so when market conditions are volatile. If you’re worried about running your retirement savings, perhaps it’s time to consider finding a home for them at the Saskatchewan Pension Plan (SPP) will invest your savings expertly, and the plan boasts an impressive average rate of return of eight per cent since SPP’s inception nearly 35 years ago. Consider letting SPP’s talented money managers assist with the worry of retirement investing.

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Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.

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