Invest in companies you know. This means thoroughly reading the accounting statements and annual reports. If you don’t have the time to do this, stick to ETFs and mutual funds. One thing we have learned from Covid-19 is business models can be upended overnight. No one expected airlines would go from record capacity to near nothing in a matter of weeks. Recovery will take some time and it’s why you need to constantly analyze your portfolio and the individual investment thesis of every company you have a stake in. If you invest in companies that have strong business models and balance sheets, you will be insulated from additional downturns in the market. Think companies without large debt loads and ample cash flow to service their liabilities. Current assets are king, back out goodwill and intangibles when factoring how much capital a company has to survive in this environment.
Anything can happen over the coming months and the best thing you can do to prepare is look over your portfolio closely. Eliminate unnecessary risk and put money to work is strong, long lasting companies.
There are risks associated with investing in securities. Investing in stocks, bonds, exchange traded funds, mutual funds, options and money market funds involve risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains & losses. Foreign investing involves special risks, including a greater volatility and political, economic and currency risks and differences in accounting methods. A security’s or a firm’s past investment performance is not a guarantee or predictor of future investment performance.
Copper Canyon LLC is a State of Florida Registered Investment Advisor. More information can be found about our firm by visiting https://brokercheck.finra.org/ and typing Copper Canyon LLC into the search box. All information detailed should not be interpreted as investment advice and you should do your own research before making an investment decision. CRD# 286061. Dylan Quintilone CRD#6732024.