The last few months have tested the mettle of even the most experienced investors. Since the market began its free-fall since March 1st, all of the major U.S. stock indices have fallen firmly into bear market territory, losing about 30% each. Unemployment applications are at a record high. Air travel and oil prices are at a record low.
With all the gloomy headlines, it’s easy to get rattled right now. However, COVID-19 presents a few excellent investment opportunities.
1. Keep Investing for Retirement
Since March 1st, the S&P 500 has lost about 30% of its value. I understand how scary this may be, but if you aren’t yet retired, now is not the time to stop investing. For those of you who remember when the financial crisis hit in 2008, stocks were down more than 50%. Since then, stocks have gone up by 250%, even after factoring the most recent losses due to COVID-19.
I cannot tell you when COVID-19 will be over or when stocks will recover, but if you have a longer time horizon, keep in mind that the stock market will eventually recover.
For retirees, give your stocks time to recover. Could they keep going down? Yes. However, COVID-19 is not a permanent thing. The average bear market typically recovers fully and makes back their losses in a year. Once the curve levels off, we should expect a recovery in the stock market.
2. Use Your Credit Cards
Some credit card issuers such as American Express and Chase have already said that they are not charging interest, late fees, or are reporting late payments to your credit agencies for the month of March. That way, you will be able to put more money into the stock market, being that the S&P 500 is down 30%.
To obtain this waiver, just call into the customer service department and ask for “the COVID-19 relief program.”
3. Delaying Your Mortgage Payment
As the COVID-19 continues to wreak havoc on the American economy, millions of homeowners have taken advantage of payment relief for their mortgage payments. Companies such as U.S. Bank and Quicken Loans have delayed principal payments and interest. In both of these cases, payments paused during this period won’t be reported to the credit bureaus
Just call into the mortgage servicing department of your mortgage lender and ask for “the COVID-19 relief program.”
4. Refinancing Your Home
The Federal Reserve took steps in March to keep money flowing into the financial system. The first cut was on March 3. Then, 12 days later, the Fed announced another surprise cut down to 0% to 0.25%. They also announced that they would buy as many mortgaged-back securities to “support the smooth functioning” of the market.
Plenty of homeowners are therefore refinancing now. For a $320,000 refinance, you can typically get rates as low as 3.25% to 3.50% on a 30-year fixed rate loan. Just to give you an idea, just a month ago, rates on a 30-year fixed rate loan were 50 bps higher, or 0.50%.
5. More Time
Prior to COVID-19, my days were typically stacked with going to the cinema, restaurants, social-dance venues, and yoga. Suddenly, all of these activities are now cancelled or forbidden giving us extra time.
Use this time to start a new business! It’s never too late to start a blog or generate a new stream of income. Just to give you an example, I was able to network myself into part-time work for a manufacturing firm and a start-up making $50.00 an hour. In addition, I’ve resumed writing once a day on the Million Dollar Tips blog.
6. Airline Tickets and Travel
According to the TSA, a record-low of 97,000 passengers were screened at airports in the U.S. on Tuesday. Just a year ago, the number was 2.1 million. As COVID-19 continues to spread around the world, airlines and hotels are slashing rates to raise cash to avoid bankruptcy.
A flight from Miami to Rio de Janeiro in late December of 2020 is $432. Chicago to Lisbon is $582. Tickets are typically 2 to 3x the price during this time of the year. Use COVID-19 to plan your next winter vacation! You can book these with your payment and interest free credit card!