These are unprecedented times for investors. The global economy is grinding to a halt so that we can stop the spread of the COVID-19 outbreak. The uncertainty is palpable. The volatility is extreme.
However, we will pull through this. The economy will begin to recover. The stock market will rebound. And we'll return to a new sense of normality, with a much deeper appreciation of social interaction after a tough period of social distancing.
I'm looking forward to that recovery. And I'm still investing during these dark days because I have hope that there will be a brighter tomorrow. Here's how I'm doing that.
Focusing on enduring qualities
One thing I've learned as an investor over the years is always to have a sizable cash position in my portfolio to take advantage of sell-offs. That practice has allowed me to buy stocks that others have had to sell to raise cash during these turbulent times. I know I'm probably not going to buy at the bottom. Instead, my focus is on investing in quality companies built to endure.
Overall, my focus has been on buying shares of companies built to endure, which includes having quality business models, excellent management teams, and strong balance sheets. Those characteristics put them in solid position to navigate through these tough times and prosper when things get better.
For example, I've long admired Alphabet (GOOG -1.22%) (GOOGL -0.95%) but never owned its stock. However, with its shares declining by more than 20% from their recent high, it's now trading at a cheap price, which is why I finally added Alphabet to my portfolio. It has developed many of the business tools that I use every day, including its iconic Google search engine and suite of workplace productivity products. Not to mention that it owns YouTube, which hosts plenty videos that help bring some laughter during these troubling times.
Alphabet, then, is one of many stocks I've purchased in the past few weeks.
Looking toward a better tomorrow
Another piece of my investing approach during these turbulent times is to buy shares of companies that are making the world a better place. One theme, in particular, that I've concentrated on is renewable energy. Not only is it cleaner than fossil fuels, but it's also becoming increasingly cheaper than all but the most efficient conventional energy sources.
I've purchased shares in several renewable energy-focused companies in the past few weeks, highlighted by an increase in my investment in NextEra Energy (NEE 0.04%). The utility is the world's largest producer of electricity from the wind and sun. It also has an excellent history of creating value for investors during good times and bad. Add in its relatively recession-resistant business model, attractive dividend, and visible growth, and it should continue generating strong total returns for investors in the years ahead.
Investing in people
Finally, one of the most important investments my wife and I are making is in people. These are trying times, and we're all a bit frightened by what the future holds. That's why we've made it a point to be extra generous, not just to help those we know are facing hardship but also to brighten someone's day. We're also doing simple things like sharing job postings and sending encouraging messages to help ease the anxiety of the current situation. We're making it a point to stay connected.
Keep your eyes on the prize
We're living through historic times right now, and no one knows how this chapter will end. What we do know is that the current uncertainty will eventually fade, and a new sense normal will emerge. That's why it's important to plan for that inevitability and make it as positive as possible. Use this time to invest in the companies that will make tomorrow a better place while also doing your part to make these dark times seem a little brighter. If we can focus on turning this challenge into an investment opportunity, it will pay dividends for years to come.