While the global effect of the coronavirus is undeniably tragic—from the heartbreaking death tolls to the anxiety-inducing market drops—it is important to try to find a silver lining. Is there anything good that can come from this?
I think there is. The millennial generation—a group I’ve talked about at length for the way they’ve changed the landscape of retirement—could be able to set themselves up very well for the future.
Barring a major job loss (tips for which I discussed in a recent podcast episode), making well-advised decisions now could mean a huge payoff in the future. Here are my tips:
Don’t panic.
There is a major trend right now of panic-selling, defined as selling off all of our stocks, regardless of company quality or outlook, in the hopes of doing so before their values drop even more. Do not do this. What this does is give wealthy investors and hedge fund managers a chance to buy your holdings at a low price and reap the rewards in the future.
The values are down now, so why sell? Instead, keep buying. Stock values haven’t dropped because the quality of the companies has plummeted, they’ve simply fallen victim to the current situation. You get to buy the same quality stocks but at clearance prices. Buy now while prices are low and let the eventual rebound do what it may.
Don’t invest it all.
At no age is it smart to have all your money tied up in investments. Yes, buying stocks now at low prices is smart, but do not drain your savings to do so. You should always have some money put aside in cash as your emergency fund.
Make sure you have enough money in savings to cover your expenses for at least three months before you start putting extra funds into your investment accounts.
Don’t get fancy.
If you’re just starting off with investing, keep it simple. In the beginning, you’re probably not putting away a huge chunk of money, so to spread an already modest contribution across multiple investments won’t do you much good.
Look for something predictable that is easy to get into, but also easy to get out of when the time comes, such as a U.S. or global equity fund.
Once you begin hitting financial milestones, it will start to make sense to add other investments into your portfolio. For example, when you hit $100,000, it may be time to look for some alternative investments, such as real estate and private debt.
Be patient.
Being young has never been more of an asset. Understand that you have time on your side and a financial crisis like this will likely arise four or five more times during your working years. It’s the nature of the beast.
The market won’t bounce back all at once, and you wouldn’t want it to. That would mean prices go back up and buying into stocks is suddenly more expensive. The market will rebound slowly, with the same dips and rises we’ve grown accustomed to. Ride the dips. Avoid selling low. Stay in the game because wealth is grown through patience and stability.
The lesson:
In uncertain and depressing times, it’s important to seek out the positives. In any financial crisis, there is a chance to come out on top. By making smart decisions now, you can set yourself up for financial success later.
Remember, you’re young. You have time. Wealth is not grown overnight.
This article originally appeared on Forbes.
