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Coronavirus (COVID-19): Stocks to buy and how to invest

Investment ideas and strategies to navigate a market crash

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COVID-19 has had an enormous impact on stock markets around the world. Between February and March, share markets in Australia, the US and the UK recorded the fastest bear market fall (a 20% or more drop) in history amid unprecedented volatility.

With country borders and countless businesses closed in response to the health threat, it has become clear that we're in the early stages of a recession. Despite that, stock markets have staged an incredible recovery in recent weeks, rising by up to 30% since April and leaving many analysts scratching their heads.

While some shareholders have been hit by heavy losses, many will be using the market volatility as an opportunity to buy quality stocks at lower prices. Others will be looking to profit from falling prices through shorting strategies. Regardless of your approach, it's a good time to review your portfolio and consider your next steps.

We've compiled a list of investing guides and stock ideas to help you navigate this turbulent time.

If you're looking for other coronavirus-related guides, you can head to our coronavirus hub page or the World Health Organization (WHO) for further advice. If in doubt, speak to a professional.

When will the market recover?

Unfortunately, it's impossible to know for certain how long the market downturn will last as we've never encountered a situation like this before. Below are a list of some of the more popular suggestions given by analysts as to what could trigger a recovery:

  • New global COVID-19 infection rates start slowing
  • Coordinated action from global governments to cull the outbreak
  • It becomes clear a credit squeeze isn't on the cards
  • Oil prices come under control and OPEC members agree on output
  • The pandemic comes under control

With businesses closing doors and forecasters predicting a the unemployment rate could hit 30-year highs, the economic fallout will be large and potentially long-lasting.

Depending on how the pandemic unfolds in the coming months, stock markets could either see a V-Shaped recovery (quick rebound) as we saw during the SARS outbreak or a U-Shaped recovery (slow rebound) as we saw following the global financial crisis (GFC).

Source: TradingView, Updated daily at 4.30pm AEST

Which stocks might drop?

Important: No one can say for certain which direction stocks will go – there's plenty of speculation about where the global economy might be headed. Below are some of the more common ideas among analysts about how stocks could be affected.

When there's a global event like this, most stocks will react negatively. Importantly, major blue chip stocks, such as the major banks, Telstra and CSL, are likely to fall, offering a potential buying opportunity at discount prices.

Because of the nature of the pandemic, tourism stocks are expected to be among the hardest hit as travel restrictions are put in place to curb the spread of the virus. This includes airlines, hotels and tour companies.

With major cities in China locked down, some analysts predict Chinese demand for imported goods could lessen as its economy slows. This means Australian companies with large Chinese exposure could see profits down this year, and investors will be pricing in that possibility.

Mining and energy companies in Australia have a strong reliance on global demand and the oil price. If the pandemic does spark a global recession, Australia's major energy companies are expected to take a hit.

No one can say how long these stocks will stay down for; however, a steep drop in prices is a good opportunity for bargain hunters willing to wait out the correction.

Travel and tourism

Blue chip stocks

Chinese demand

Energy companies

Which stocks could benefit?

A global crisis typically results in safe-haven investing, which means bonds and gold. This tends to send the gold price soaring while bond yields drop as demand goes up. Read our full guides on gold and bond investing for more information.

This often (although not always) results in gold company stocks becoming more popular. Because gold stocks are influenced by many factors such as profit results and new discoveries, it's also possible for stocks to go backwards.

A pandemic also benefits a few specific sectors, such as healthcare, insurance and protective gear manufacturers, such as face-mask suppliers. Meanwhile, companies that support working or studying from home should also react positively as people are forced to isolate themselves.

Gold companies

Healthcare

Protective wear/wash

Working/studying from home

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How to invest when there's a market crash

When markets crash, it can be tempting to sell your shares in an attempt to avoid further losses. But this is not necessarily the best strategy, especially if you hesitate on pulling the trigger.

Stock market downturns are a reality, and must be considered alongside the record gains of recent years. It's often a better idea to ride out the volatility rather than try to time the market, according to Shane Oliver, chief economist at Australian financial services giant AMP.

A lot of people get tempted to sell, then suddenly the markets find a bottom. Before you know it, they're back above the levels where a lot of people sold.”

– Shane Oliver, AMP's chief economist

Know your strategy

Your best course of action in the event of a crash will depend on your trading strategy and overall investment goals, according to Michael McCarthy, chief market strategist for share-trading platform CMC Markets, who spoke to Finder. "In most cases, investors should be reviewing closely and working out what a 10% drop or a 20% drop would mean to their holding. Whereas somebody who's taking a more active approach might start weeding their portfolio."

It's important to know what your goals are and whether a crash has impacted your ability to achieve those goals. It is possible that a crash gives you some good reasons to sell.

Be prepared to buy the dip

When markets dip, you can make money. The key thing is to be ready for this to happen and to have the funds to snap up shares when the prices are low.

Timing the market is incredibly hard and you're very unlikely to get the stock at its absolute lowest, but as with all investments, if your intention is to hold for the long term, it can be a good opportunity to snap it up at a lower cost.

One way to prepare if you're an active investor is to keep a list of stocks that you would be willing to buy if a crash happens.

Seek financial advice

When stocks are crashing it is easy to get swept up by your emotions. If 20% of your portfolio value has been knocked off, you might not be in the right frame of mind to be making decisions which could impact your financial future.

Seeking a second opinion, ideally from a financial adviser, can give you some perspective to your thinking and guard against any rash decisions.

What happens after a crash?

Following a market crash, stocks are likely to experience a period of volatility as investors reevaluate the market. But downturns can also represent investment opportunities, especially if there are certain stocks you think may have switched from overvalued to undervalued.

Cautious investors may often flock to "safe haven" investments like gold, bonds or even bitcoin, so a market downturn may be a good time to think about diversifying your investment portfolio.

If history is any indicator, the markets should eventually rebound, but trying to determine when this will happen is the million-dollar question. Stocks may recover within weeks or months, or we may be faced with a years-long bear market, especially if global recession fears turn out to be on the money.

Promoted
Low brokerage fees on Australian and international shares.

How to profit from a falling market

It's possible for traders to profit when prices are falling through a strategy called "shorting the market". Because this is typically a risky strategy, only experienced traders are advised to do this.

The most common ways that people can profit from falling equity, currency or commodity prices is through CFD, Forex or options trading. You can check out our guides on those below:

Share Trading Account Offer

IG Share Trading Offer

AUD 8

Standard brokerage - Australian shares

Share Trading Account Offer

Competitive broker fees on Australian shares, international shares, forex and CFD trading.

  • Brokerage - AU shares: From AUD 5 or 0.05%
  • Brokerage - US shares: USD 0
  • Sign-up process: Instant
  • Support - After hours: Yes
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More info

Important: Share trading carries risk of capital loss.

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Compare trading platforms

Data indicated here is updated regularly
Name Product Standard brokerage fee Inactivity fee Markets International
IG Share Trading
Finder Award
IG Share Trading
AUD 8
AUD 50 per quarter if you make fewer than three trades in that period
ASX shares, Global shares, Forex, CFDs, Margin trading
Yes
Brokerage discount: $5 on Australian shares for active traders & $0 commission on US and global shares
Enjoy some of the lowest brokerage fees on the market when trading Australian shares, international shares, forex and CFDs, plus get access to 24-hour customer support.
eToro Share Trading (US stocks)
USD 0
USD 10 per month if there’s been no login for 12 months
Forex, CFDs, US shares
Yes
Zero brokerage share trading on US stocks with trades as low as $50.
Note: This broker offers CFDs which are volatile investment products and most clients lose money trading CFDs with this provider.
Join the world’s biggest social trading network when you trade stocks, commodities and forex from the one account.
Superhero share trading
AUD 5
No
ASX shares
No
Pay zero brokerage on all Australian ETFs.
Trade ASX stocks with a flat $5 commission fee and a low minimum investment of just $100.
CMC Markets Stockbroking
AUD 11
No
ASX shares, Global shares, Forex, CFDs, Margin trading, Options trading, mFunds
Yes
$0 brokerage on global shares including US, UK and Japan markets.
Trade up to 9,000 products, including shares, managed funds, forex, commodities and cryptocurrencies, plus access up to 15 major global and Australian stock exchanges.
ANZ Share Investing
AUD 19.95
No
ASX shares, Global shares, Margin trading, Options trading
Yes
Earn 1 Qantas Point per AU$3 spent on brokerage fees on certain instruments.
Access Morningstar reports, company announcements and and live pricing via ANZ’s share investing platform. Available for desktop and mobile.
Westpac Online Investing Account
AUD 19.95
AUD 63.50 per year on the global markets account
ASX shares, Global shares, Options trading, US shares
Yes
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Important: Share trading can be financially risky and the value of your investment can go down as well as up. Standard brokerage fee is the cost to trade $1,000 or less of ASX-listed shares and ETFs without any qualifications or special eligibility. If ASX shares aren’t available, the fee shown is for US shares.

Data indicated here is updated regularly
Name Product Minimum Opening Deposit Minimum Opening Deposit Commission - ASX 200 Shares Available markets Platforms
eToro CFD
USD 50
USD 50
No commission
ASX shares, global shares, indices, cryptocurrencies, commodities, ETFs
eToro Trading Platform
Disclaimer: Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Join the largest social trading network in the world.
Plus500 CFD
AUD 100
100
No commission
CFDs on ASX shares, global shares, indices, options, ETFs
Plus500 Web Trader
Disclaimer: Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Finder exclusive offer: Open a new trading account and receive a welcome bonus of AU$110 when you deposit your first $370 and enter the bonus code “Special200”. T&C’s apply.
Trade CFDs on Australian and International shares, indices, cryptocurrencies, commodities and more.
IG Markets CFD
AUD 0
0
0.08% with $7 minimum
Indices, FX, Shares, Commodities, Cryptocurrency, ETPs
MetaTrader 4
ProReal Time
Disclaimer: Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Introductory offer: Build confidence by trading at lower minimum trade sizes for the first six weeks. Plus, receive a reduced commission on Australian shares CFDs. T&C's apply.
Trade from over 15,000 markets with Australia's leading service for CFD trading and forex.
IC Markets CFD (True ECN Account)
$200
$200
0.1% per side
ASX shares, global shares, indices, commodities, forex, cryptocurrencies
MetaTrader 4
MetaTrader 5
cTrader
Disclaimer: Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Trade 230+ different products with fast execution under 40 milliseconds on average.
City Index CFD
AUD 0
0
0.08% with $5 minimum
ASX shares, 4,500 global shares, indices
MetaTrader 4
At Pro
Advantage Web
Disclaimer: Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Trade CFDs on indices, FX, global & Australian shares and commodities, plus access other markets such as metals, bonds and interest rates.
Blueberry Markets CFD Trading
$100
$100
$20 per month subscription plus 2% of trade size
Indices, ASX200 Shares, Commodities, Cryptocurrency
MetaTrader 5
Disclaimer: Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Bottom of the market fees on forex, CFDs and commodities with 24/7 quality customer service.
Pepperstone CFD
USD 200
200
No commission
ASX shares, global shares, indices, cryptocurrencies, commodities
MetaTrader 4
MetaTrader 5
cTrader
Disclaimer: Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Trade stock indices on the global market, via Pepperstone's MetaTrader 4 and cTrader client terminals.
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Trading CFDs and forex on leverage is high-risk and you could lose more than your initial investment. It may not be suitable for every investor. Refer to the provider’s PDS and consider the risks before trading.

Data indicated here is updated regularly
Name Product Monthly fee Options trading fee Standard brokerage fee
CMC Markets Options Trading
$0
$33 up to $10,000, 0.33% above $10,000
AUD 11 or 0.1% for first 10 trades up to AUD 10,000
ANZ Share Investing
$0
$34.95
AUD 19.95
Earn 1 Qantas Point per AU$3 spent on brokerage fees on certain instruments.
Access Morningstar reports, company announcements and and live pricing via ANZ’s share investing platform. Available for desktop and mobile.
Westpac Online Investing Account
$38.95 or 0.35% of trade value, whichever is greater
AUD 19.95 or 0.11%
CommSec Options Trading
$0
$34.95 up to $10,000, 0.35% above $10,000
AUD 10
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Data indicated here is updated regularly
Name Product Minimum Opening Deposit Minimum Spreads for Major Currencies Commission Minimum Trade Size Platforms
eToro Forex Trading
USD 50
1.0 pips
$0
US$200 (to CopyTrade)
eToro Trading Platform
Margin FX is a complex financial product and traders are at high-risk of losing all of or more than their initial investment.
Social trading, advanced charting tools, plus receive exclusive benefits through the eToro Club (membership is tiered based on the equity in your trading account).
Plus500 Forex Trading
AUD 100
0.7 - 3.0 pips
$0
0.01 lots
Plus500 Web Trader
Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Finder exclusive offer: Open a new trading account and receive a welcome bonus of AU$110 when you deposit your first $370 and enter the bonus code “Special200”. T&C’s apply.
Open an account and experience Plus500's easy-to-use proprietary trading platform, 24/7 online chat support and free real-time forex quotes.
IG Forex Trading
AUD 0
0.6 - 1.5 pips
$0
1 lot
MetaTrader 4
ProReal Time
Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Introductory offer: For the first two weeks of trading, take advantage of IG's lower minimum trade sizes to help you build confidence.
Choice of trading platforms. Choose optional extras like advanced charting, reporting and order types. Over 90 currency pairs to choose from.
IC Markets Forex Trading (Raw Spread account)
USD 200
From 0.0-0.1 pips
AU$3.50 per 100k traded
0.01 lots
MetaTrader 4
MetaTrader 5
cTrader
Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
City Index Forex Trading
AUD 0
0.5 - 1.22 pips
$0
0.01 lots
MetaTrader 4
At Pro
Advantage Web
Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Choice of trading platforms, integrated Reuters news and device-synching so you can monitor trades across multiple devices.
Blueberry Markets Forex Trading
$100
From 0.0 pips
$0
0.01
MetaTrader4, MetaTrader5
Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Bottom of the market fees on forex, CFDs and commodities with 24/7 quality customer service.
Pepperstone Forex Trading (Razor Account)
USD 200
0.0 - 0.1 pips
AU$3.50 per 100k traded
0.01 lots
MetaTrader 4
MetaTrader 5
cTrader
Margin FX is a complex financial product and traders are at high-risk of losing all of or more than their initial investment.
Choose from a range of fee-free funding methods, plus a suite of 10 different apps available as part of Pepperstone's Smarter Trading Tools.
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Trading CFDs and forex on leverage is high-risk and you could lose more than your initial investment. It may not be suitable for every investor. Refer to the provider’s PDS and consider the risks before trading.

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Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involve substantial risk of loss and therefore are not appropriate for all investors. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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