Investing in the time of Covid19


If you’re like me, you are staying calm and not checking the market indices or your portfolio every day. But that’s because I am a cruddy old woman who has been through market impact of Gulf War, 9/11, dot com crash, 2008 crash, 2014-2016 oil price crash and witnessed the market recovery after each case.

But even I know, this time it’s different.

This time it is not a Financial Crisis, this time it’s a Crisis of Basic Necessities — a Health Crisis. No matter how much interest rates are cut, if we have to #StayHome, #SelfQuarantine or #SelfIsolate, we cannot PARTICIPATE in the economy to impact its financial growth.

So, What should we do?

In a few short posts, I hope to share my thoughts on:

1. How to prepare in this uncertainty

2. How to secure your wealth

3. How to get back in the market

4. Any other stray or unprecedented thought that may attack my brain

Usually, I’d be looking for bargains at this time, but even the most prolific bargain hunters are sitting on the sidelines or probably sending their minions to buy them toilet paper.

Take Care of Yourself First

You know, Maslow’s Hierarchy of Needs has never been more relevant nor more clearly displayed across the globe as it is today.

Today, first and foremost, people are rightly worried about their personal wellbeing. So, they are stocking up on food, medicines and for some inexplicable reason, toilet paper. The top two segments in the pyramid is out the window now. They don’t matter now.

The third segment, “Belongingness and love needs”, are always important except please show your love by #SocialDistancing, #SelfIsolation, #SelfQuarantine, phone calls and video chats.

Once you have food, shelter and much needed time to organize your thoughts, what should you do next?

Safety Needs, Preserving Wealth

I have been investing in the stock market since I was 27 years old. Whether you are in the market at the moment or not, the first sting to do is take stock (no pun intended) of your financial position.

1. Make a budget, if you don’t already have one. Allocate for Rent or Mortgage, Food, Utilities (Electricity, AC, Phone), Food and yes NETFLIX / AUDIBLE so you don’t go stir crazy if you are in quarantine or isolation. Cut out non-essential spending like new clothing, makeup, etc. Just the basics ma’am, just the basics. You can save on food also if you choose to cook or buy local produce.

2. Make sure you have enough cash to survive 6–12 months. I honestly believe, that in this unprecedented case, you may want to ensure you have enough cash (or liquidity) to survive even 12–24 months, especially if governments are not going to kick in with stimulus packages that directly benefit you.

3. If you have cash leftover after you #2, then we can look at bargain hunting for cheap stocks.

Bargain Hunting

I have a few good friends who are brokers or investment advisors who are now in a spot of bother. Their customers are watching their life savings go all pear shaped and want to cut their losses. I usually try to convince folks not to book losses now because you are scared. However, today, people may actually need the money to pay for food and rent. They may not have a choice. I hope this is not the case for most of you.

If you can afford to not sell your stocks or mutual funds, please speak with your broker or financial advisor on how to mitigate your risks. Ask for payment holidays if you are locked into a compulsory monthly payment plan.

Back to Bargain Hunting. At the moment, I am not doing any buying or selling. However, I am making a list of stocks I would like to buy when things settle down. I have some cash set aside that I will use for this. In general, I don’t agree with portfolio managers who advise a balanced portfolio that has only 10% or so in cash. I keep a lot more in cash. Like I said, I’ve been through enough crashes to know that cash is always king. Its extremely personal though. How well do you want to sleep at night? Would you rather have 90% of your wealth invested for a potential +/- 30% return or would you invest 70% in the market for a potential +/- 30% return and have 30% of your wealth returning 0% to 3.5%. Okay, those who are going to object saying that money in the bank is essentially losing value because of inflation, etc., I know. That’s why you invest 50% — 70% trying to earn between 5% — 30%

Let me illustrate further. Hat Tip: I found thss brilliant chart in Sam Ro’s tweet. (Twitter: @SamRo)

Billionaires hold 12% in Cash. But 12% of $1 Billion is $120 Million! I think we can safely bet that $120 Million is sufficient to survive most pandemics. 

For the average healthy saver, even if you have $100,000 invested, 12% is only $12,000/- and most of us would find it very difficult to survive 1 year on $12,000/- To put that in perspective, in the USA, a family of 4 is living below poverty if the annual household income is less that $25,750 

What is sad is that in the USA, the bottom 50% don’t even have 12% in cash. In fact they have 6% in cash. (I wish I had figures for UAE, but I’m pretty sure the wealthy invest about the same here in UAE.)

Once you have sufficient cash for emergencies, we can start looking at multiplying our wealth with investments in the market. For me, the fundamentals of how I choose stocks or ETF’s have not changed even in these tumultuous times.

  • I love companies that have a lot of cash on hand. Just like individual bargain hunters with cash on hand, these companies can weather the storm and are best poised to buy technologies and other companies at the cheap.
  • I love companies with cash and low debt. Remember, even if large sectors like airlines, banks etc., get bailed out, the equity holders get wiped out in a bail out as they should. Debt holders will help restructure the company. (For refresher, you can look at GM bailout in the aftermath of 2008 financial crisis).
  • I love companies that have low fixed assets and healthy margins. These companies can flexibly scale up or down during a crisis.
  • I try to understand which companies and services will continue to thrive once the crisis is averted. People will still drink Starbucks, eat at McDonalds, buy Tylenol, run in Nike shoes, fly for tourism and business. Some businesses like Google, Amazon, Alibaba, etc., may even gain more market share after the crisis. ( Please listen to this amazing podcast by Professor Scott Galloway (Twitter: Scott Galloway), “Love in the Time of Corona”. He talks with eminent Professor of Finance, Aswath Damodaran (Twitter: @AswathDamodaran ) about investing during these times, and I found it to be extremely useful and calming.)

What to Buy

At the moment, I am not buying or selling anything. However, I am making a list of stocks that I like based on the fundamentals I like as explained earlier. Let’s start by looking at companies that are cash rich. This is just a teaser and I will come back with more details in the next blog.

The top 10 US companies with the most cash on hand as on Dec 31 2019. Source:

PS: Why are these companies holding so much cash if everything should be invested?

Take Aways:

  1. Take care of yourself. Social Distancing works.
  2. Budget and prioritize your spend.
  3. Set aside enough cash for 6–24 Months of living expenses as possible.
  4. Don’t panic.
  5. Identify stocks or ETF’s you would like to buy.
  6. Watch them.
  7. Strike when you feel confident.

Remember, no one can accurately predict the market. Time IN the market matters.

This too shall pass.

Finished reading? Check out my next blog where I show how remaining invested in an index fund like S&P500 even through crashes would have increased your wealth.

If you would like to understand more, please feel free to reach me, on Twitter @saq3 or LinkedIn @Shaheeda Abdul Kader, or leave a message at say I’d be happy to offer you my services.


I am NOT a certified broker or financial advisor. Please DO NOT make investment decisions based solely on my blogs. My intention is to show you how to research stocks or funds for yourself so you can feel empowered and knowledgeable to do your own investigations and invest with confidence. It is best to consult with your broker or advisor if you have questions. You can also reach me, and I’ll do my best to help you with your queries.

Shaheeda Abdul Kader

After 25 years of working for corporations, being an entrepreneur and managing investments for my family, I now want to help others find their financial freedom