Investor’s Safe Haven During COVID-19

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2020 started with a sudden flood of turbulent news that impacted the world’s health and economy. A significant number of people lost their jobs, companies are declaring insolvency and many investors are losing sleep due to the sharp falls of the most important global indices. However, even in the most complex situations where everything seems lost, there will always be some industries, economic sectors, and even some stock market instruments that can serve as a safe haven during these distressing times. Below is an overview of five of the most promising ones.

  1. Streaming platforms: With Disney surpassing the 50 million active accounts barrier in the last month and Netflix acquiring more than 7 million new accounts in the last quarter, it is clear that these platforms have been able to take advantage of these times, according to CNN Business*.
  2. Essential products’ manufacturers: In times of a pandemic, people make their best effort to have a sufficient supply of hygiene care products in case of eventual shortages. Such is the case of Colgate-Palmolive according to Forbes**, which has lost only 3.5% of its value, very little compared to the S&P 500, it is also expected to have a recovery in the coming months.
  3. The Swiss franc, a stable currency: According to studies performed by the German Central Bank, the Swiss franc is a currency that has historically tended to appreciate when the world’s stock indices have been under “stress”. Even today with the arrival of the COVID-19, this currency continues to behave in a stable way and always an option to keep in mind, according to Investopedia***.
  4. Gold: According to Bloomberg****, gold has historically been a safe haven for investments when the US dollar has lost its value. Since gold generally backs the dollar reserves, its value growth is proportional to the decrease in the US dollar.
  5. The pharmaceutical industry: According to Finanzas.com*****, given the situation, the pharmaceutical sector has been advantageous because of its essential role in this case, in addition to their steady climb even before the pandemic happened. Companies such as Novartis, Rocher, Bayer, Pfizer, among others, are well regarded by investors at a global level, in addition to their stock market valuation showing positive signs.

As Warren Buffet said, “A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful,” according to CNBC Make it******, which illustrates about knowing how to find the right opportunity patiently while others think that all is lost.

References:  

  • GARCÍA, E.*****
    Coronavirus. Las farmacéuticas europeas y estadounidenses se preparan para la escalada bursátil
    (García, 2020)
    García, E., 2020. Coronavirus. Las Farmacéuticas Europeas Y Estadounidenses Se Preparan Para La Escalada Bursátil. [online] Finanzas.com. Available at: <https://www.finanzas.com/renta-variable/farmaceuticas-una-oportunidad-de-inversion-impulsada-por-el-coronavirus_20037771_102.html> [Accessed 23 April 2020].

  • MONTAG, A.******
    This was Warren Buffett’s ‘simple rule’ for investing during the financial crisis — and you can still use it today
    (Montag, 2020)
    Montag, A., 2020. This Was Warren Buffett’s ‘Simple Rule’ For Investing During The Financial Crisis — And You Can Still Use It Today. [online] CNBC. Available at: <https://www.cnbc.com/2018/09/14/warren-buffetts-rule-for-investing-during-the-financial-crisis.html> [Accessed 23 April 2020].
     
  • PALLOTTA, F. AND ISIDORE, C.*
    Tiger King + coronavirus = Huge win for Netflix’s stock
    (Pallotta and Isidore, 2020)
    Pallotta, F. and Isidore, C., 2020. Tiger King + Coronavirus = Huge Win For Netflix’s Stock. [online] CNN. Available at: <https://edition.cnn.com/2020/04/19/investing/stocks-week-ahead/index.html> [Accessed 23 April 2020].
  • THANGAVELU, P.***
    Is the Swiss Franc a Safe Haven?
    (Thangavelu, 2020)
    Thangavelu, P., 2020. Is The Swiss Franc A Safe Haven?. [online] Investopedia. Available at: <https://www.investopedia.com/articles/forex/031715/swiss-franc-safe-haven.asp> [Accessed 23 April 2020].
  • WHY COLGATE-PALMOLIVE STOCK HAS BEEN A SAFE HAVEN DURING THE COVID-19 CRISIS? **
    (Why Colgate-Palmolive Stock Has Been A Safe Haven During The COVID-19 Crisis?, 2020)
    Forbes. 2020. Why Colgate-Palmolive Stock Has Been A Safe Haven During The COVID-19 Crisis?. [online] Available at: <https://www.forbes.com/sites/greatspeculations/2020/04/20/why-colgate-palmolive-stock-has-been-a-safe-haven-during-the-covid-19-crisis/#3a4b86cd5233> [Accessed 23 April 2020].
  • WOOLLEY, S.****
    Where to Invest $10,000 Right Now
    (Woolley, 2020)
    Woolley, S., 2020. Where To Invest $10,000 Right Now. [online] Bloomberg.com. Available at: <https://www.bloomberg.com/features/how-to-invest-10k/> [Accessed 23 April 2020].

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