Passive investing can do the trick in a raging bull market. When entire markets rise by 20% or more in a year, as in 2019, you can do well with a simple index tracking ETF.
When instead markets are crashing 30% of more in a single month, you need to be decidedly more selective.
Healthcare stocks are getting a lot of mainstream attention. And for good reason. Not all healthcare stocks have gone up since the market cottoned onto the potential fallout from the virus. But many have.
Like Fisher & Paykel Healthcare Corp Ltd [NZE:FPH].
The company makes medical devices used to treat respiratory illnesses. One of the main complications from the coronavirus.
Bucking the trend, FPH just issued a profit upgrade as demand for their products soars.
The share price is up 5.4% over the past month, at time of writing. Not the kind of gains you might have bragged about last year. But in that same time, the ASX 200 is down 27.8%.
Get ready to act early
The Rum Rebellion editor, Greg Canavan is already focussing on the opportunity. And he’s advising you get ready to act early on once the crisis begins to subside.
‘Once this virus subsides — and it will — markets will look at economic growth and corporate earnings returning to normal. I believe that will result in a strong rebound.
‘That’s especially the case given all the cash central banks are pumping into the markets. In the fear and panic stage, such actions seem to fall flat. There seems to be an inexhaustible demand for cash. No matter what central banks pump in, there is demand for it.
‘But when the panic subsides, there will be a lot of cash looking to move back into equities. I don’t know when that is. But it will happen.’
With that said, now is not the time for wild punts on stocks that appear to be good value.
Do your research carefully and ask for professional advice as needed before investing your hard earned cash. And if you have any stocks really dragging on your portfolio, you may want to cut them loose.
PS: While most every stock has come under selling pressure in recent weeks, The Rum Rebellion editor Vern Gowdie lists five stocks he believes you should consider selling immediately. You can find out which ones, and why, in his free special report here.