The coronavirus pandemic has caused a great stock market crash and put many investors on high alert. Today you simply cannot afford to keep your “comfy” portfolio and hope for the best. US stocks are getting riskier by the day and the situation isn’t likely to change. Therefore, this is the right time to turn to countries that are already past the worst of the pandemic. New Zealand stands out among them both due to strong stocks and the fact that it’s among the leading countries in defeating the virus.
Why You Can’t Put All Your Trust in US Stocks Any Longer
The US economy isn’t faring well in the current crisis triggered by the COVID-19 pandemic. Despite ample support from the Federal Government, businesses are failing and the country’s economic infrastructure is at risk. Millions of people lost their jobs and the situation with the pandemic doesn’t seem to improve by much.
Relief programs, like the Paycheck Protection Program, are designed to help businesses weather the worst of this storm. However, their funding is insufficient to save everyone.
All things considered, it’s no wonder that the US stock market has become a risk in itself. And this situation won’t improve until the pandemic is defeated. Even then, the economy will take a while to restore. Therefore, as an investor, you might start losing money very soon, if you aren’t already.
One of the most effective solutions to this problem is to diversify. Looking into stocks in other countries is definitely the best option at the moment. And considering the fact that this recession is caused by the pandemic and subsequent lockdowns, the countries you should focus on are the ones that got through it.
Of course, according to experts, the pandemic might last for the next two years. Therefore, even countries that show improvement at the moment might experience a second and third wave of the virus.
In the meantime, some states have already proven that they are capable of crushing the spread of the disease fast. It’s safe to assume that their results will only improve if another wave occurs. There are already effective strategies in place in those countries. So risks for businesses there are minimal.
How New Zealand Fared Under the COVID-19 Pandemic Impact
Speaking of countries that have proudly defeated the coronavirus pandemic, New Zealand is one of the leaders among them. The lockdown measures implemented there were severe, but they brought impressive results. As the situation stands now, there is very little risk for a second wave of coronavirus occurring in New Zealand. The country’s economy is restarting with alacrity, which makes it one of the more promising investment opportunities.
For investors, this country offers some solid promise of returns in the not-so-distant future. Also, with specialized online platforms and brokers transferring money to NZ has become easy and cheap. For smaller investors, this is a major consideration because it immediately allows you to save up to 7% of every transfer. And you’ll need to make quite a few of those if you plan to make the most of the New Zealand stock market.
This market has crashed, like all others, in the beginning of March. However, it has been growing steadily ever since. As the majority of other countries are currently unable to show such a positive and stable dynamic. NZX50 definitely is something you should look into.
New Zealand Stocks You Should Pay Attention To
New Zealand is a small country and the stock options here aren’t as impressive as in the USA. You definitely won’t find a new Tesla here. However, instead, you might get some reliable investment that will yield long-term returns.
Sadly, some of the most promising businesses here were badly affected by the pandemic. The hospitality industry worldwide has suffered greatly. Restaurant Brands New Zealand, in particular, had a hard time because of the circumstances.
But some industries are growing, instead of shrinking, in response to the pandemic. Fisher & Paykel Healthcare stands out as one of the most promising options in the industry. It was doing well before the pandemic started and it should only get better.
Among other top traded options today are:
- Spark New Zealand Limited Ordinary Shares
- The a2 Milk Company Limited Ordinary Shares
- Oceania Healthcare Limited Ordinary Shares
- Australia and New Zealand Banking Group
- Z Energy Limited Ordinary Shares
Investing in New Zealand is a long-term plan. Therefore, you need to be prepared that you won’t be getting immediate returns. Instead, you should focus on security you get with this addition to your portfolio.
Also, while making your investments here, you need to remember the golden rule of every investor. It’s not only the stock you buy that matters, it’s what you sell as well. Any effective investment strategy will include three essential steps, buying, monitoring, and selling.
You can easily enough research information that will help you determine what the good stock to buy is. However, the other two steps are trickier. You’ll need to focus on research and monitoring of your entire portfolio performance next. Don’t forget to follow global news to learn how global economic factors can affect your investment.
Finally, reevaluate your portfolio and sell off anything that doesn’t benefit you immediately or presents too much risk.
Cautious investors would like that New Zealand has quite a few options for dividend investments. Therefore, the “investment for yield” strategy should work well in this country.
In Conclusion: Looking for Diversity as an Investor
Being an investor during a global recession is a challenge. Therefore, you need to rely on diversification more than ever. There is no avoiding some losses in such a volatile situation. However, by spreading your investments not only through industries but also countries, you can minimize the risks.
As the coronavirus recession is gaining steam, you should look to invest in countries that were hit the least. Therefore, start by studying the effectiveness of the state’s response to the pandemic. As New Zealand has proven, it’s possible to stop this virus and jumpstart the recovery of local economies. And investors should take the opportunity offered by such states’ stock markets.
[This site is provided to you for informational purposes only and should not be construed as an offer to buy or sell a particular security or a solicitation of offers to buy or sell a particular security. The authors & contributors are not registered financial advisors and do not give any personalized portfolio or stock advice.]
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