By James Yeo //
June 9, 2020
cash flow positive stocks

The COVID-19 crisis has turned the already shaky financial markets in 2019 into a much worse condition. The stock market was very volatile in the past month, and overall the numbers are not looking to get better pretty soon.

As a result of this, many people are getting desperate and are looking for drastic solutions including bad credit loan options to improve their finances. However, with every crisis, there are always new opportunities, and financial recessions like these are always among the best times to start investing.

However, figuring out how to invest your money right can be quite challenging for beginners. There are certainly a lot of different investment options we have today, but too many options and information can be overwhelming.

Here, we will share everything you need to know to start investing right away.

How To Start Investing In 2020: Your Investment Options

Although, as mentioned, there are a lot of different options to invest in, there are only five important ones to include in your initial investment portfolio:

1.    Fixed Income (debt fund)

Fixed-income investments, or also popularly known as debt funds are a type of investment where you invest your money in fixed-income securities including but not limited to debentures, corporate bonds, and government securities. With this, debt funds are relatively stable and consistent performers while offering much better results compared to fixed deposits (FDs).

Another key benefit of investing in debt funds is the versatility of choice: there those with really short-term (1-15 days) and really long terms of up to 10 years. Fees on debt funds are also lower than equity funds (which we’ll discuss below).

2.    Equity Investment

Equities—or shares— are always the favorite when talking about portfolios due to one important reason: it has a very good return which can beat inflation.

In equity investment, we purchase shares of a company, obviously with the expectation that these shares will generate value, whether you get capital dividends or capital gains. When equities rise in capital gains, you can get profits when you sell your shares. Even if you keep the shares, you can get paid in the form of capital dividends.

However, equity funds are riskier than debt funds, and so you must manage this well by limiting exposure based on time, that is you should invest in long-term, at least 3 to 5 years period and you should be patient during market volatility.

3.    Liquid Funds

Not exactly an investment product, per se, but in any investments, it’s important to really embrace the concept of “cash is king” in maintaining your investment portfolio. It’s important to keep ready cash with an amount that is comfortable enough to meet emergencies (which are very important in this COVID-19 crisis) and unforeseen expenses.

Having liquidity is also very important so you can always be ready when opportunities come. For example, if there’s a sudden underpriced real estate, you can grasp this opportunity, or when there’s an opportunity in equity investment due to asset price collapse.

In short, having liquid funds to seize opportunity should be an important consideration of your investment portfolio.

4.    Investment Bonds

‘Bonds’ are essentially an investment where you lend money to the bond issuer, and you’ll get profits in the form of interest payments in return. The bond issuer here can be the government, company, or individual, and when you purchase a bond, you are allowing this bond issuer to borrow your money.

Bonds are generally a safer investment when compared to equities, but at the same time they offer lower average returns. Since bonds are technically a loan, then the bond issuer could default, so it’s very important to choose a legitimate bond issuer. U.S. government bonds are generally the safest, followed by state/city government bonds. Of course, bonds issued by large, popular companies are generally safe.

The total principal loan is paid off at the bond’s maturity date and before that, we can expect regular ‘installments’ as income payments, annually or once every six months.

5.    Physical Commodities

Commodities are any goods that are uniform in utility and quality regardless of their source. For example, when you buy a potato at a supermarket, it won’t really matter where the potato was grown since commodity goods are interchangeable.

Investing in commodities tend to be more volatile than shares (stocks) and bonds, but some commodities like gold are relatively stable. This is why gold and other precious metals are still very popular investment choices. However, even gold is sometimes volatile and in general, more commodities tend to switch back and forth between stability and volatility along with market dynamics.

Gold historically performs pretty well against inflation, economic depression, and other uncertainties, as we can see from the performance of gold prices during this COVID-19 crisis. Also, platinum and silver are always great choices, and can sometimes generate more returns than gold.

Diversifying Your Investment Portfolio

The key here is to build an investment portfolio that includes a mix of the five options discussed above. How you can balance your portfolio will ultimately depend on your investment objectives and factors like:

  • Risk tolerance: whether you are okay with variability/volatility. Some people have a more high risk/high return mentality, some others tend to be more conservative
  • Time frame: for example, if you are investing to get enough money for a wedding in 2 years.
  • Liquidity: how much cash you have on hand
  • Revenue: how much you make in a year

A well-balanced portfolio should include liquid cash (remember, cash is king), equities/shares, bonds (both government and corporate), precious metals, and property (if you can afford it at the moment).

If you want to be more aggressive, you can include a higher percentage of more high risk/high return investments like equities in your portfolio. Vice versa, if you want to be more conservative, you can include more investments with lower risks like bonds.


When investing, it’s very important to keep a diversified portfolio where the whole portfolio is less volatile than the individual investments included in it. This is how we can withstand variability in the long run and hedge our investments against inflation.

However, it’s also important to maintain your liquidity, to help cope with uncertain times such as this COVID-19 crisis, while at the same time providing us with the ability to seize sudden opportunities.

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