The Wuhan Coronavirus or COVID-19 outbreak has resulted in widespread fear and paranoia along with panic buying. With markets crashing and store shelves emptying, uncertainty reigns supreme with many governments scrambling to contain the crisis.
At the time of writing, COVID-19 has killed more than 6,500 people with the death toll climbing every day. Officially recognized as a pandemic by the WHO, the COVID-19 virus has revealed the dangers of our globalized economy.
With China nearly brought to her knees by the pandemic, the prospect of a global recession has been looming ever closer. From Malaysia to Italy, central banks and governments alike have been attempting to alleviate the pressure on their respective economies.
For example, Malaysia’s central monetary authority; Bank Negara, has taken steps to slash the key rate in an effort to boost spending in the wake of political instability and a further worsening COVID-19 crisis.
Further compounding all of this uncertainty has been the collapse of global crude oil prices that have triggered a price war between several OPEC countries. In an effort to keep revenues up, major oil producers have fought against measures intended to curb production.
Consequently, the Saudi-Russia price war has placed downwards pressure on oil prices – a situation which has led to more panic.
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With such a bleak outlook for 2020, the question on every investor’s mind is this; are there any safe havens left anymore?
Fortunately, there are plenty of opportunities still for the savvy investor. As stock prices go into free fall, now is in fact the perfect time to snap up some choice stocks for your portfolio.
In this article, we take a look at what you can do to prepare you and your portfolio for the storm that is sure to come.
1. eCommerce stocks
Electronic commerce or eCommerce is defined as a business that includes the buying and selling of goods and services online or over the internet. Amazon.com, Alibaba, e, Netflix and Lazada are all examples of eCommerce businesses.
Transactions are performed on a digital storefront from the comfort of one’s own home. With just an internet connection and a PC or smart device, just about anyone can head online and go shopping.
The remote nature of eCommerce is what gives it the advantage in times such as these where quarantines and curfews can be a very real threat in the near future.
As people all over the world begin bunkering down, many are likely to turn towards online shopping and streaming services. Whether they’re shopping for goods or entertaining themselves, chances are streaming, and online shopping are going to get a boost.
Thus, making now a good time to snap up some eCommerce shares in anticipation.
2. Biotech and pharma stocks
While COVID-19’s fatality rates are relatively low, its highly-contagious nature means that it can spread relatively quickly in a short amount of time. This has resulted in healthcare centers all over the world being overwhelmed with sick patients who remain highly contagious.
Consequently, healthcare professionals such as nurses and doctors have succumbed to the virus whilst further spreading it to friends and family.
In the wake of it all, biotech and healthcare related businesses have all scrambled to develop a vaccine for COVID-19. While we may be still several months away from a working vaccine, investors have jumped on the opportunity to snap up biomedical stocks in anticipation.
With their huge profit margins and pivotal role during a health crisis, the healthcare industry is a solid option for investors looking to diversify their portfolios.
3. Retail business and FMCG stocks
As we’ve seen in all countries hit by the COVID-19 crisis, empty shelves and crowded supermarkets dominated headlines as panicked consumers attempted to stock up on as much goods as possible.
During such times, medical equipment suppliers and retailers are sure to be laughing all the way to the bank as revenues soar. While other stocks may be looking bleak, “crisis stocks” such as Campbell and Walmart are set to be a good buy in the current market condition.
While things may be looking bleak for the foreseeable future, with the right preparation and care, you’ll be able to weather even the harshest storm. Always remember to practice good hygiene and keep yourself healthy.
Tarik Pierce is the founder of InvestorTrip.com and regularly contributes articles to this website.
While living overseas, he uses PureVPN for a low cost VPN service.
He recommends Bluehost for setting up your own personal and/or business blog.
While his background is mostly related to trading stocks, he recently gained interest in real estate crowdfunding with Fundrise.