A WORD FROM THE AUTHOR: I hope everyoneās having a great week and you received your $1,400 stimulus payment (depending on eligibility). Whatās your action plan for that? In this article, I wanted to take the time to reflect on my personal finances since last year. As always, I am not a financial advisor. Enjoy!
A Look-Back
Itās been over one year since the COVID-19 recession began on February 20th, 2020. Wikipedia attributes unemployment, collapsed oil prices, a rise in economic inequality, and more as we continue combating this global recession. One year later and some Americans are in an entirely different scenario than where they had started in 2019.
Iāve compiled a few lessons Iāve learned throughout the past few months:
The Stock Market Bounces Back
Always Invest in Your Future
Key Stock Indicators
The Stock Market Bounces Back
There was a time when I invested a majority of my first stimulus check into a stock market fresh off the heels of a massive sell-off. I was uncertain and anxious that the market would take years to recover. This is my first time (as an adult) experiencing a recession like this. Like many millennials, weāve been through three recessions during our age range of financial development.
According to NPR, millennials had less wealth in 2016 than previous generations did at that age.
All I could do was sit and wait with these discounted stocks. I didnāt know how long but I put my faith into the stock market rebounding.
My bet paid off. One year later and Iām in a comfortable spot to pay off my student loans in full (if student loan forgiveness isnāt passed first). Currently, weāre at all-time highs as stocks saw red this past week.
My biggest lesson here is to invest for the future and put your faith in the market. The market gets knocked down but always gets up again.
Always Invest In Your Future
Investing in your future is the best thing you can do for your finances and other aspects of life. The marketās reaction to COVID-19 gave me an opportunity to enter the market at a lucrative time.
Before then, I told myself I would take investing more seriously but never did. I said, āStocks are too high. I can only buy one share of X stock.ā I never got around to it.
Remember that investing your money is something you should be doing consistently. If I had still taken investing seriously before the marketās reaction, I would have nearly double the profit I have today.
Remember that time in the market is always better than timing the market
Key Stock Indicators
One of my biggest lessons is how certain securities react to market conditions. For example, whatās applicable to retail is not the same as healthcare within their respective sectors. It was eye-opening to see firsthand which stocks people were flooding with their cash. From what we saw in 2020, hereās a brief list of stocks to note in times of economic hardship from U.S. Money:
Target (TGT)
Loweās (LOW)
Nike (NKE)
NextEra Energy (NEE)
Walmart (WMT)
Dollar Tree (DLTR)
Home Depot (HD)
Notice something similar going on? A majority of companies are looking to put money back into the pockets of consumers. From Dollar Tree to Walmart, times of economic hardship signal that these types of retail businesses will see a share price spike. This is only one example but there are plenty of data trends to compare and contrast.
Have a great week!
-Jordan