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- Before the coronavirus sent global markets into a tailspin, I was planning to move $1,000 from each of my daughters’ savings accounts into an investment account to take advantage of the opportunity for higher returns.
- Constant news about market volatility brought on by the coronavirus inspired me to open the accounts right away, since the stock market was more on my mind.
- My funds were withdrawn on March 9, when the market dropped nearly 8%, but professionals say there is room for future growth.
- A financial planner can help you set up a smart investment strategy. Use SmartAsset’s free tool to connect with a qualified professional »
Last week the buzz about the coronavirus and its impact on global markets reached a crescendo. As I listened to the news, it served as a constant reminder to me: I really need to open that investment account I’ve been considering, I thought. Now’s the time to do it.
For months I had been contemplating moving a portion of my daughters’ savings from high-yield saving accounts to an investment account. The money is a general savings fund that I plan to give them when they’re young adults.
Since they’re only 1 and 5 right now, the money has plenty of time to grow. I wanted to leverage the historically higher return rates of the stock market for my daughters, rather than letting their savings earn just 1-2% interest in the bank.
Despite my interest in opening the account, the task kept getting pushed to the back burner. Then, the coronavirus and its economic impact pushed it back to the front of my mind.
The market downturn was a reminder to invest
As I listened to continuous news of stock market drops, I realized that now is as good a time as ever to open an investment account. With the markets down, stocks are cheaper. Since I was planning on opening the account anyway, buying stocks at a bargain price seemed like a great idea.
To be clear, I wasn’t gleeful about the idea of potentially profiting off an economic downturn. I have no idea if this will be the right choice in the long run. However, since I was planning to invest anyway, doing it now while prices are down was particularly appealing. I wasn’t very concerned about an additional drop, since I plan to have the money invested long term.
I opened the account over the weekend, and the girls’ contributions — $2,000 total — were added on Monday, the same day markets plunged nearly 8%.
What the professionals say about investing amid coronavirus-related market volatility
Keith Fitz-Gerald, an investment analyst, says that I did the right thing sticking to my plan despite market volatility brought about by coronavirus fears.
“People who were planning to invest definitely should continue investing,” he says. “Now is a good time to buy if you have the right perspective.”
If you’re looking at the long term (like I am, investing money I don’t plan to touch for at least 15 years), buying now is a safe bet. Plus, the money I’m investing is savings that would be nice to have for my children, but it’s not essential money I’ll need, like a retirement fund. That frees me to take some risks with it.
“Playing offense even when the world seems like it’s going to hell in a handbasket is always the better choice than missing an opportunity,” Fitz-Gerald says.
Now that my investment account for my daughters is open, I’ll be resisting the urge to check in on it. I’m just going to step back, and trust the market to do what it has done historically: grow.
Talk to a financial planner today about your investment strategy. SmartAsset’s free tool can help you find a qualified professional near you »
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