Author Topic: Buying Shares During a Pandemic  (Read 1361 times)

slim

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Buying Shares During a Pandemic
« on: March 23, 2020, 09:10:54 AM »
Thoughts on buying more shares during this time?  In my case we have quite a bit of cash that we have been saving up for a down payment on our first home.  We just renewed our lease, and I feel that this cash could be invested in the meantime while stocks are at discounted rates. Is now a good time to invest even if we are potentially looking to buy a house in a year or so?

DadJokes

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Re: Buying Shares During a Pandemic
« Reply #1 on: March 23, 2020, 09:13:42 AM »
Common advice is to never invest money that you need in the next few years.

Rob_bob

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Re: Buying Shares During a Pandemic
« Reply #2 on: March 23, 2020, 02:39:03 PM »
Only if you are willing to delay buying a house.  Cash is King now.

Ecky

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Re: Buying Shares During a Pandemic
« Reply #3 on: March 23, 2020, 07:34:52 PM »
I expect stocks might have further to fall. Wait a bit, get in on it after rock bottom.

marty998

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Re: Buying Shares During a Pandemic
« Reply #4 on: March 23, 2020, 07:49:59 PM »
Thoughts on buying more shares during this time?  In my case we have quite a bit of cash that we have been saving up for a down payment on our first home.  We just renewed our lease, and I feel that this cash could be invested in the meantime while stocks are at discounted rates. Is now a good time to invest even if we are potentially looking to buy a house in a year or so?

This is a batshit crazy idea. Sorry to be harsh, but you need to understand it.

I expect stocks might have further to fall. Wait a bit, get in on it after rock bottom.

No. Not even if it hits rock bottom, even if you could predict that.

One should invest according to their goals. OP wants to buy a house. OP has a deposit. Therefore OP should not be risking the deposit.

It's pretty simple.

BicycleB

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Re: Buying Shares During a Pandemic
« Reply #5 on: March 23, 2020, 10:46:43 PM »
I think it depends on your income, expenses, job security, and willingness to be flexible. Also the size of the cash fund relative to annual savings, and to the purchase amount needed.

For example, if you have a 50% savings rate with wonderfully secure jobs and the cash is one year's savings, while only 1.5 years' savings is needed for the purchase, I'd invest much of it in stock index funds. Because even if stocks fall another 50%, you'd save enough in a year to make the purchase. Flexibility would be your backup plan. In other words you're safe in this scenario, why not pick up some gains?

If your savings rate is 30%, your jobs are uncertain, the cash is 2 years' savings and you need 3 years' savings to make the purchase, plus you are highly determined to buy the house at the end of this lease, I would be like the other posters and say hell no. Because your plan would fail under even a slight dip.

Stock prices are much lower than six weeks ago, but it's debatable how much better the value is. I think there's so much uncertainty and fear that the odds are now in your favor with stock purchasing, all other factors being equal - but the other factors are far more important in this case.