Many investors are happily bidding farewell to 2020, the most challenging year in history, and optimistically looking forward to the future. President-elect Biden will be in office on January 20th with challenges, not the most important one. The complete section will be tasked to guide the country through the final stages of the coronavirus pandemic (hopefully), make the economy roll again, and shrink the ranks of the unemployed.
Preparing for the financial situation for the coming year is one of the smartest things you can do now, especially since there is no guarantee of a timetable for the United States to return to normal. This means looking at your investments and goals, and establishing stability for your financial life. One of the most important factors for maintaining stability during turbulent times is to provide high-quality fixed cash.
Cash is king in 2021
The omnipotent dollar is powerful when needed. Nothing you have can buy you a gallon of milk at the grocery store, but if you have enough cash on hand, you don’t have to worry about how to pay the bill immediately.
This is one of the reasons why financial planners recommend that everyone have an emergency fund, which should have enough cash to cover three to six months of expenses. Moreover, if you doubt the validity of the proposal, last year should be able to show you why such a large cushion is needed.
This year, tens of millions of real Americans are facing a cash crunch. According to data from the Center for Budget and Policy Priorities, one-third of adults can’t afford to pay, 7 to 11 million children don’t have enough food because their families lack food, and about one-sixth of tenants default on rent.
Now, although the light of an effective coronavirus vaccine is shining in the country, it will take some time for everyone to be vaccinated before people can return to normal life again. Pfizer He said the vaccine will not be available to the entire American public on demand until June or July. modernThe COVID-19 vaccine received an emergency use authorization from the FDA late Friday, which will increase the existing supply.And other vaccines AstraZeneca with Johnson Still in clinical trials. In any case, there is still a long way to go to vaccinate enough people, and there is indeed the possibility of further economic turmoil and more economic pain before the country starts to recover from a real pandemic.
Why do you need cash
After considering all the above factors, you can take the following actions to protect your financial health: Deposit some cash in 2021. If you still want to know why, please consider the following:
- The unemployment rate remains high.
- The epidemic has reached new heights, and the number of new infections and deaths every day is more than twice that of the worst peak period this summer.
- There is no better protection against financial or personal crises than cash.
- The more liquidity you have, the more you can take advantage of buying opportunities in the stock market.
Ready for investment opportunities
As many investors learned (or relearned) in 2020, taking advantage of market pullbacks is a great way to build a portfolio. Those who have cash on hand in a bear market and want to trigger the trigger are now getting good returns.For example, if you buy a share enlarge Based on the price of $113.11 on March 2, your stock will be valued at $402.35 on December 17, with a return of 255.7%.Another big winner is Paypal: The stock price on March 2 was 112.86, while the stock price on December 17 was $235.72, an increase of 108.9%.
You can be sure that there will be a lot of investment opportunities in the coming year, because the stock price will not rise sharply, but will fluctuate.
This year will be a smart way to prioritize the accumulation of cash so that you can prepare for a crisis and also take advantage of the market’s retracement. The coronavirus pandemic is not over, and the economy will not fully recover for a long time. When things get tough, make sure they have enough cash just in case.