I am self-employed and I do not have a regular income. My savings are drying up due to COVID-19 but I have invested about $10k in stocks previously. I know it's a bad time but should I sell my stocks?

Hi anon,

Sorry to hear about your situation. Do tap into government assistance first. I wrote an answer about that here:

https://seedly.sg/questions/i-am-a-grab-driver-...

If, after assistance, your emergency funds start to run low, then you might have to sell your stocks. Depending on the market situation, you might have to liquidate at a loss. However, we have to face the reality that stocks don't put food on the table, but money will. Thus, if push comes to shove and you need to sell your stocks, just do it. At least you could possibly recover at least half of your investment (hopefully) which would help you tide across another few months, during which I hope you will be able to find a job.

You can always rebuild your portfolio and emergency funds after the economy recovers. As a self employed, please keep more in emergency funds as our earnings tend to swing wildly and are quite lumpy at times. Remember that any money invested should not be needed in the next 1 year at least, and probably more. This prevents you from having to liquidate at market lows. I wish you best of luck.

Cash Flow

Firstly, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit.

Here is a Guide:

Understanding Your Personal Cash Flow

Improving the situation

Thereafter, we should brainstorm on the possible ways to increase your income and reduce your expenditure. Meanwhile, we will monitor your savings and other liquid resources to check how long we can last to this end.

Review

Next, we will do an investment review to understand whether your portfolio is capable to help you reach your goal.

If yes, then go back to brainstorming ways to improve your cashflow situation. By doing so, we try to avoid selling your stocks at a less than optimal position.

If no, then we have no choice but to sell the stocks since we need the money for survival. There are always opporunities in the market.

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