COVID-19: 8 things you should do now instead of investing – Economic Times

By Uma Shashikant

The markets are crashing. What should I be doing? Is this an opportunity? Is it time to buy already? These questions are irrelevant. We are so used to the narrow definitions of up and down and think that everything can be summarised into simple action points. The pandemic that the world faces is different. So different from what most of us alive now have seen before, and we are all still learning what to do.

First, the only thing that matters is the amount of cash you have in hand. Understand that it is tough for money to be drawn from a falling stock market, or for money to be invested. Draw if you have no cash, even if it is at a loss. If you already have enough in the bank, stay put. This is not the time for any investment decision. Investing when the future is unknown is to venture into the unknown dark without a torch in hand—it is plain foolhardy. There is no smart timing decision to be made. We are literally in war zone, so survival is priority. Ensure enough cash to manage yourself and the household and medications, for a period of three months.

Second, recognise that this is new territory. In the era of social media, there is too much information floating around. There are jokes to lighten the mood; and there are useless forwards. Hawkers of quackery should be ashamed of themselves. Train your eyes and ears on what has worked for countries that have suffered before yours got hit. Keenly hear what your government, local authorities are saying. Social isolation is what seems to have worked in China and South Korea. Reduce social interaction; adopt isolation voluntarily; drop the bravado and focus on prevention and care for yourself and your community.

Third, not all businesses can close down. Many have customer interaction, production deliveries and team tasks that require the workforce to turn up and be around to complete assigned tasks. There are emergency services that must work come what may. Businesses are taking a call about working from home, reducing team activity, and in extreme situations, these have also shut down temporarily in affected countries. A complete shutdown of all activity has been the measure that brought the spread of the disease and the number of newly afflicted down. As an investor, know that this is a step with serious economic implications. Markets are panicking since this is unprecedented. Unless you run a business, don’t make any economic decisions at this time. Don’t buy or sell assets or modify your investments. Stay put.

Fourth, do not hoard as if you are faced with a famine. Shutdowns have been implemented by governments for periods of 15 days, extended by a week or more as needed. Normalcy cannot be claimed to have returned even in the most impacted areas, but the only positive is that new numbers of afflicted persons have begun to fall. If you prepare for say 3 months of being confined to your home, you don’t need half the super-market in your pantry. Pull out those boxes of quinoa you did not consume; that ragi flour you never opened; those stone cut oats you did not cook. To think you must solve for life as usual for yourself when the world is scrambling for supplies is selfish. Buy responsibly. We aren’t running out of sun, air and water.

Fifth, be grateful for the community and take charge. The need for a helping hand is high when normalcy is affected, especially for weaker sections. If there are elderly citizens in your neighborhood, reach out to them. Make corrections for not caring about who lived next door. Without caring and sharing, it would be tough to ride through a period of isolation. Unlike floods that many of us have faced, this pandemic does not allow us to stay together as a large group. Community solutions of cooking and staying together are unavailable to combat a disease that requires isolation. Put the social media tools to use to connect and help the community, by devising methods to reach out remotely and to manage situations as they arise, to offer help and solace. Responding without crowding up is new to most of us, but we have no choice but to learn it now.

Sixth, do not obsess about the loss in value of your investments. Do not pontificate that you saw it coming. There is the important difference between wealth and income; stock and flow. The wealth you accumulated over a lifetime in investments has eroded in value as the markets have crashed. But what matters currently is the income, the flow. Do you have a job that offers salary even during the shutdown? Are you confident you will keep the job through and after this period? You are fortunate. Evaluate your income and prepare to hunker down and sacrifice it for a brief period and still survive. Wealth will return to its value after the crisis has blown over; if you have the privilege of not having to access it now, stay calm. Don’t keep looking at market numbers.

Seventh, find the positivity in you to be the person the situation demands. If you have to volunteer to work for free at the nearby hospital, do it; if you have to be the one who creates an app in the neighborhood for eradicating food waste in households, create it; if you can run a bulletin board that provides information on how many are infected, do it; and be willing to see yourself as a soldier in the field, willing to work for a larger cause. If you can find innovative ways to keep your family engaged as you stay in, do it. Read, write, quilt, cook, garden, repair, deep clean—there is a lot to do indoors as a family. Do not make a buying list!

Eighth, drop the denial. The problem around us is real, and the world has not yet found a solution. There is no need to fear and panic. But it is important to recognise that this is new, big, and completely unknown. A pandemic of this magnitude will call for action and behaviour we have not known before. Drop tactical thinking and prepare.

(The writer is Chairperson, Centre for Investment Education and Learning)

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