How to Invest in a Crisis: Think Closer to Home

Editor's Views: As people's daily lives are turned upside down, this may be a good time to buy shares in companies whose products you can't do without

Holly Black 27 March, 2020 | 10:39AM
Facebook Twitter LinkedIn


Morningstar analysts think there are more buying opportunities than sell signals amid the current stock market turmoil. But that requires courage; courage I’m not entirely sure I have.

I haven’t looked at my own investment portfolio since January. What’s the point? I invest in funds rather than individual stocks and I know I have picked those funds for good reasons and for the long-term. I can only imagine that looking at their performance in recent weeks would be concerning at best and panic-inducing at worst.

Yet one of my own investment theories really seems to ring true at the moment: buy what you know works.

As we go about our daily lives, it is the companies we cannot do without that seem poised to prosper. On a high street you can see the stores that thriving and those that are barely surviving (I’m talking pre-covid crisis, here) and can use that as a base investment case. I have been saying for years, for example, that you only have to look at a Debenhams store to know it’s struggling, while Wetherspoons branches up and down the country are heaving (again, pre-covid). And their respective share prices have reflected this disparity.

This strategy seems increasingly relevant at the moment. If you are looking for those buying opportunities, then it might be worth considering those companies that are making your life bearable right now.

Whether it’s Microsoft and Zoom making your working life possible, Ocado managing to get you a semblance of a food delivery, or the social media firms keeping you in touch with friends and family. Maybe Netflix or Amazon Prime are helping to pass the time in the evening or you cheered when Disney launched its streaming service in the UK this week. It’s your internet provider that enables you to watch those, of course, and if your house is as cold as mine you’ll be relying heavily on your utilities providers at the moment too.

It is those businesses that have the ability not just to survive but to thrive at times of crisis that will endure, and they could also get your investment portfolio through this too.

Here Comes the Bounce

If there's anything more fickle than a stock market, I don't know what it is. Honestly, a British summer is almost more predictable than the FTSE.

Almost inexplicably, after the catastrophic falls endured last week, the FTSE 100 enjoyed its second-best day on record this week. A 21% rise on the Dow in just three days, incredibly, puts it back in bull market territory. We say it often, but this is a case in point of why you should Never Try to Time the Market

Sure, there's still a way to go before markets recover the losses of recent weeks, but if you panicked and sold last week you're going to be a lot longer in catching up than if you'd stayed the course. 

Don't Forget Your Isa

It might seem unfathomable to be thinking beyond anything outside of the realms of the coronavirus at the moment but I think it's worth reminding readers that there is only one working week left in the current tax year. 

It's use it or lose it when it comes to your annual pension and Isa allowances, so if you haven't yet used yours up, you may want to consider topping up your accounts. That might not feel particularly appealing right now but remember you can park the money in cash, even in an investment account, for now and put it to work later.

We'll have plenty of investing ideas and Isa tips for you all next week, so make sure you visit if you're in need of some Isa inspiration. In the meantime, stay safe and stay indoors. 


The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Holly Black  is Senior Editor,


© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures