We’ve ventured into unknown waters around the world right now. This coronavirus has spread across continents, putting a halt to business operations everywhere. The economic impact has been startling, and it’s resulted in one of the biggest stock market crashes of all time. People are comparing this to the global financial crisis in 2008, with some even going as far as to say that this is worse.
The question on everyone’s lips is; what does the market crash mean for your finances?
Whether you’ve got existing investments or not, this situation will have a profound impact on your money in more ways than one. It may be bad in some ways, but it can be good in others.
You’ll lose money on your current investments
This is the obvious downside of the whole situation. As the stock market crashes, any investments you have will decrease in value. Some people are losing thousands of dollars – some even more! It depends on what you invested in, so be prepared to see some significant losses.
But, fear not. You will only lose this money if you sell your investments during this period. Avoid doing this as it could be one of the biggest financial mistakes you ever make. While everything is very much down in the dumps right now, most people believe things will improve eventually. If possible, hold onto your investments and wait until the global economy turns a corner and starts moving up once more.
You can pick up some really cheap investments
The flip side of things is that it’s a better time than ever to get some investments in. If you’ve never invested in stocks or shares before, then you should start right now. Research the top ASX shares to buy, and you can snag them for a bargain. Then, when the stock market starts improving, you can see some incredible future returns! Even if things don’t improve for a long time, you won’t lose much money as you’ve bought the stocks so cheaply.
It’s the classic investment approach; buy low, sell high!
Borrowing money is more affordable
When the stock market crashes like this, it’s due to an economic meltdown. As such, nobody wants to spend any money. The big cats in charge of the world hate this. They need people to spend money to try and stimulate the economy. Therefore, interest rates all over the world are dropping to the lowest they’ve been in years. This means it’s much cheaper to borrow money than it was a couple of weeks ago.
Consequently, this can be good news for your finances. If you’ve been saving up for a home, then you could now afford a mortgage due to low-interest rates! Again, you can take advantage of this situation to put yourself in a better financial situation.
The bottom line is that everyone is pretty scared right now. All this talk about market crashes and viruses can be overwhelming. But, be aware that there are opportunities out there for you. Things aren’t all that bad, and you can certainly turn this into a great financial situation.