26 Smartest Ways To Invest Your Money During the Pandemic

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While the overall economy is still suffering from the coronavirus pandemic, the stock market already has bounced back. After bottoming out in March, the Dow Jones Industrial Average and S&P 500 each had jumped more than 50% by mid-August, ABC News reported. But is the market due for a downswing? And are stocks a good choice for every type of investor? What might seem like a good investment for you might be too risky — or too safe — for someone else.

In general, the most conservative investments offer the lowest returns but protect your initial investment. As you move up the risk ladder you take on greater price volatility in exchange for potentially higher long-term returns. Cash investments are the least risky, followed by bonds and stocks.

Not sure where to invest right now? Here’s how the experts say you should invest your money amid the pandemic.

Last updated: Mar. 10, 2021

Smart Beta Minimum Volatility Funds

  • Safe or Risky: High-risk, high-reward

Smart beta funds attempt to use various investment factors that have been proved to enhance long-term returns. Low volatility funds are a subset of smart beta funds that aim to reduce risk by investing in lower-volatility securities. Although these funds cannot eliminate risk, their investment mandate is to at least smooth out the ride. This can make investing in the market less stressful during the uncertainty caused by the coronavirus.

Investing for Everyone

International Stock Funds

  • Safe or Risky: High-risk, high-reward

The United States comprises approximately 44% of the world’s stock market capitalization, so it’s always been a good idea to diversify into international stock funds. In any given year, the U.S. might or might not be the country with the highest stock market returns, so diversifying your exposure makes sense. This is particularly true during periods of uncertainty. U.S. and global stocks experience different economic and market forces, even during the current global emergency, so owning international stock funds leads to lower portfolio volatility and higher, risk-adjusted returns.


Real Estate Investment Trusts (REITs)

  • Safe or Risky: High-risk, high-reward

Real estate investment trusts enable small investors to own a piece of the real estate pie. A REIT is a firm that owns or finances income-producing real estate. Similar to mutual funds, REITs offer investors regular income streams, diversification and the potential for long-term capital appreciation.

During the outset of the coronavirus crisis, many REITs got pummeled as the world essentially shut down and the revenue stream for these companies dried up. Once the crisis is resolved, however, the REITs that are in a stronger financial position could end up appreciating significantly, in addition to maintaining their dividends. Still, this amounts to a risky bet, as no one is certain how long this crisis will last.

Luke Lloyd, wealth advisor and investment strategist at Strategic Wealth Partners, recommends investing in data center REITs.

“Commercial real estate could take a hit given the current mentality of ‘work from home’ and the need for less office space,” he said. “However, there could be opportunities in data center REITs that house the infrastructure buildout of the technology sector. These data centers house the servers and technology that support the cloud network companies operate on.”

Investing for Everyone

Robo-Advisor Investment Manager

  • Safe or Risky: Variable depending on manager and investments

Robo-advisor accounts automatically manage your investments in line with your risk tolerance and goals. Vanguard, Schwab and independent shops — including Personal Capital, Wealthfront, SigFig and Betterment — offer a variety of robo-advisor accounts and services.

Robo-companies create diversified portfolios with low account management fees, and some offer access to a human investment advisor. Most robo-advisor accounts include easy-to-use investment apps.

During times of market uncertainty, a robo-advisor can be a good option because it takes emotion out of the investing equation. Rather than trying to manage your own portfolio, agonizing over the large losses and wondering if you should buy or sell, a robo-advisor will keep you to your predetermined investment plan.

US Treasury Inflation-Protected Securities (TIPS)

  • Safe or Risky: Safe

U.S. Treasury Inflation-Protected Securities, or TIPS, are safe in that they are backed by the full faith and credit of the U.S. government. You can buy individual Treasury inflation-protected bonds on the Treasury Direct website or in a low-fee mutual or exchange-traded fund. TIPS protect your cash from inflation.

While you won’t have to worry about losing your principal, you might not get much by way of a return. Inflation is likely to be held in check throughout the coronavirus crisis, as falling demand overall is likely to more than offset the temporary price spikes in certain goods. This dampens the inflation-protection element of these bonds, as inflation is unlikely to rise dramatically, thereby lowering overall return.

Investing for Everyone

Municipal Bond Funds

  • Safe or Risky: Safe, but riskier than usual

Generally, municipal bonds’ interest payments are tax-free on the federal level, and if they’re issued by your state, you won’t have to pay state taxes. Municipal bonds are traditionally a safe haven for investors, but in the current market environment, they might be riskier than usual.

With rampant unemployment and the shutdown of almost every aspect of American life, the credit quality of these bonds could take a significant hit. This is particularly true of revenue bonds, which rely on consumers using their services to pay the interest on the bonds. One way to diminish this risk is to buy insured municipal bonds only — although in that case, you’re relying on the solvency of the underlying insurers as well.

529 College Savings Plan

  • Safe or Risky: Varies based on chosen investments

A 529 plan is a tax-advantaged savings vehicle designed to help you save for college for a child or family member. Also known as a qualified tuition plan, 529s are sponsored by states, state agencies and educational institutions. You can choose from a variety of stock, bond and cash investments in your 529 account.

Although the investments in these accounts are likely to remain volatile for the foreseeable future, 529 plans are generally long-term investments. If your child has 10 or more years before the money will be needed for college, you’ve got a long runway to earn back any losses and then some. Regular investments in these plans during volatile market times actually can add to your long-term returns over time, as markets historically recover from major sell-offs.

Investing for Everyone

Global Bond Funds

  • Safe or Risky: Moderate

Investing in a foreign country’s debt can increase your returns and diversify your investment portfolio. When you invest in global bond funds, however, you take on additional risk.

All bond funds carry interest rate risk, which is the risk that your value decreases as interest rates rise. Global bond funds also might carry currency risk unless they are hedged. In these uncertain times, global bonds also have additional country and political risk, as the economic devastation wreaked by the global shutdown is hard to quantify on a country-by-country basis.

Certificates of Deposit

  • Safe or Risky: Safe

Certificates of deposit offer a fixed rate of interest on your investment for a predetermined period of time. CDs also have the benefit of Federal Deposit Insurance Corp. guarantees of up to $250,000 per account. This can provide peace of mind in troubled times, such as during the current pandemic.

If you can afford the initial investment, Juan Carlos Cruz, founder of Britewater Financial Group in Brooklyn, New York, said he recommends investing in high-yield CDs, which typically offer higher rates than a standard CD.

“The HYCD works just like a regular CD, but may require a higher balance than other CDs and to hold for a longer period of time,” he said. “Please do your research and check with your local bank for the minimum deposit for this type of account.”

CD laddering is a smart strategy that enables you to take advantage of regular investments to garner the best yields, regardless of whether rates are rising or falling going forward. For example, if you have $10,000 to invest, you might spread that out by investing $2,000 each in a 12-, 24-, 36-, 48- and 60-month CD. Look online for promotional CD rates to get the most bang for your buck.

Investing for Everyone

Broad-Based US Bond Funds

  • Safe or Risky: Moderate

A diversified bond fund such as the iShares Core U.S. Aggregate Bond ETF (ticker: AGG) or a mutual bond fund like the Vanguard Total Bond Market Index Fund Investor Shares (ticker: VBMFX) can provide you with great exposure to the U.S. investment-grade bond market. Both funds spread your investments out among corporate bonds and U.S. government bonds with various maturities.

The risk you take when you invest in anything but the shortest-term bond funds is that when interest rates rise, the underlying principal value is likely to fall. As interest rates are at historic lows, if rates rise in the future, you could lose some of your principal.

Target-Date Funds

  • Safe or Risky: Less risky

Also known as lifecycle funds, target-date mutual funds are designed for the investor who wants a “set it and forget it” retirement investing option. Choose the year you want to retire or access the money and your investments go from risky — when you have many years to go until your goal date — to more conservative as you get closer to retirement.

If you’re willing to hold your target-date fund until maturity, it could be a good option to ride out the current market volatility. Since most target-date funds have longer maturities, you likely can recover any current losses over the long run.

Investing for Everyone

Passively Managed Stock Index Funds

  • Safe or Risky: High-risk, high-reward

When you’re looking to match an index’s performance, ETFs might be good investments. Superstar investor Warren Buffett loves index funds, and they typically feature rock-bottom management fees.

It’s tough to outperform a fund with low fees like the Vanguard Total Stock Market ETF (ticker: VTI), which has an expense ratio of just 0.03%. If you’re a long-term investor, you’ll be ahead of the game if and when the market ultimately hits a new all-time high.

Individual Stocks

  • Safe or Risky: High-risk, high-reward

Public companies offer you a chance to own a piece of them — and when the business grows, so does your portion of ownership. You’ll have to do your homework, but if you can research and buy companies that have the potential to perform strongly through the pandemic, you have an opportunity to realize tremendous growth with individual stocks.

“We still think stocks are the best path to long-term growth, but that can be hard to stomach with all the volatility we’ve seen,” said Rob Emrich III, founder and managing partner of Acruence Capital. “We expect volatility levels to remain high, as measured by the VIX, particularly around and after the election. Investors could potentially benefit from owning investments that respond favorably to rising volatility.”

The stock market already is paying off for some investors, despite an initial dip in March.

“The stock market has been showing phenomenal growth,” said Chalmers Brown, co-founder and chief technology officer at Due. “I’ve been putting a greater investment into that since April and it’s really starting to pay off. Some stocks are even splitting, giving me even more growth potential and return. Those that may have small amounts to invest could do so through apps that let you buy percentages of stock shares. This makes this investment opportunity accessible to everyone.”

Not sure which stocks to choose? Find an advisor to guide you through the process.

Individual Retirement Accounts

  • Safe or Risky: Depends on the investments selected

An IRA helps you save for retirement and reduces your taxes. Any money you invest in your traditional IRA comes out of your taxable income, which saves you money at tax time.

“When investing in a retirement account, you also get tax advantages — tax deductible contributions for pre-tax amounts or tax-free withdrawals in the case of Roth contributions — that allow your money to work harder for you,” said Carrie Schwab-Pomerantz, a senior vice president at Charles Schwab.

You don’t get an immediate tax benefit on your Roth IRA contributions, but when you begin taking qualified withdrawals after you reach 59 1/2 you won’t be taxed on that money. You can open either type of IRA account at a bank or online stock brokerage and fill it with stocks, bonds, funds or other types of investments.

As money you put into an IRA is intended for long-term growth, continuing to make contributions during market downturns can pay off in down the road. Choose appropriate investments that match your investment objectives and risk tolerance to make the most of your IRA.

Employee-Sponsored Retirement Accounts

  • Safe or Risky: Depends on the investments selected

“If you are fortunate to have an employer that offers a 401(k) match, make sure you are investing a minimum of whatever the matching rate is,” Schwab-Pomerantz said. “It’s essentially free money.”

Even if you don’t have an employer match or it has been suspended, Schwab-Pomerantz said it’s still a good idea to keep investing in your retirement fund.


  • Safe or Risky: High-risk, high-reward

Commodities include precious metals, coffee, orange juice, oil, gas and a number of other raw materials. You can buy a commodities fund or participate in a commodity futures contract.

Some investors believe commodities are a good source of diversification, although they’re volatile, complex and not well-suited for investing for beginners, according to Fidelity. Two of the largest commodity funds are the Invesco DB Commodity Index Tracking Fund (ticker: DBC) and the iShares S&P GSCI Commodity-Indexed Trust (ticker: GSG).


  • Safe or Risky: High-risk, high-reward

As gold doesn’t pay dividends or generate any income or revenue, it’s a pure commodity play. Gold is generally used as a hedge against market volatility, rather than a long-term, buy-and-hold type investment.

“The yellow metal has a storied record of thriving during times of uncertainty and volatility, and these factors have propelled gold to be one of the best-performing investments of the COVID economy,” said Ryan Giannotto, director of research at GraniteShares, an ETF issuer based in New York.

Actively Managed Stock Funds

  • Safe or Risky: High-risk, high-reward

When you buy an actively managed mutual fund, you’re hiring an investment manager who chooses investments he believes will outperform the market. In the current volatile market, hiring a professional to help you pick your investments can be a prudent move. Just make sure you find a fund manager who’s in line with your approach. Actively managed funds can be found for nearly any investment category, from stocks or bonds to precious metals and international bonds.


  • Safe or Risky: High-risk, high-reward

Cryptocurrency is a digital, decentralized and encrypted currency. The first cryptocurrency, Bitcoin, was invented in 2009. Although millions of people use cryptocurrencies, they are still a nascent market. Coupled with the fact that crypto is not endorsed or supported by any government and is shrouded in mystery, its price can be volatile.

In the week of Sept. 13, 2020, for example, the price of Bitcoin fluctuated between about $9,950 and $10,700. Articles in the investment community say Bitcoin can hit any price between $0 and $100,000, evidence of the great uncertainty surrounding the investment. Regardless of whether you’re investing in crypto during the coronavirus crisis or in more normal market conditions, expect extreme volatility.

Foreign Exchange Market

  • Safe or Risky: High-risk, high-reward

Foreign currencies are traded on the foreign exchange market, and they represent a high-risk investment strategy. If you’ve traveled in a foreign country, you understand how currency values fluctuate — forex traders attempt to benefit from those fluctuations. Because of the risk level involved with forex, this type of investment is best left to sophisticated investors. This is particularly true during the coronavirus epidemic, as emotions and other nonfinancial forces are acting on currency exchange rates that may be harder to predict.

Sector Funds

  • Safe or Risky: High-risk, high-reward

A sector fund is one that invests only in businesses that operate in a particular industry or sector of the economy. If you have a hunch that a certain sector, such as oil or healthcare, will outperform in the future, this type of fund might be for you. Sector funds include stocks, bonds and other financial assets.

Sector funds are not as diverse as broadly diversified funds. When sectors drop in value your funds will drop as well, which makes these risky investments. A perfect example is the United States Oil Fund ETF (ticker: USO), which had dropped more than 71% for the year through Sept. 14. If you believe oil will stage a massive turnaround, this could be a great high-risk, high-reward play. However, the size of the selloff is an indication of the risk involved.

Lloyd recommends investing in the technology and healthcare sectors in our current climate.

Savings Accounts

  • Safe or Risky: Safe

In the current market environment, savings accounts are like gold. They are insured up to $250,000 and are completely liquid. The downside is that yields are tumbling as the Fed has cut rates to essentially zero. Still, online savings accounts and cash management accounts such as Wealthfront and Betterment can still pay much better than the national average savings account rate of 0.09%, which itself is likely to tumble. During a global emergency such as the coronavirus, bulking up your savings is a good strategy. This is especially true if you are currently lacking an emergency fund.

“Schwab conducted a recent survey that found 50% of Americans could not cover an unexpected expense of up to $1,000,” Schwab-Pomerantz said. “Given that, I think one of the best things people can do with any extra money right now is increase their savings. If you’re short on emergency funds (or dipped into them) due to the pandemic, focus on replenishing them in case something else comes up — car repair, reduction in hours/furlough, plumbing emergency, etc.”

Megan Morton, a member of the founding team at Calendar, said she has taken that advice herself.

“I’ve actually been spending less money each month due to fewer trips and no commute. This has left me with some money that I would’ve had to spend prior to COVID-19. The extra funds are being invested directly into my emergency fund,” she said. “COVID-19 really made it clear why an emergency fund is necessary because you never know what may happen.”

Your Home’s Equity

  • Safe or Risky: Safe, if you can afford it

“I’m putting more equity in my home by making additional principal payments,” said Jon Bradshaw, founder and president of Codebase. “I see some people are refinancing and taking cash out, but they are losing equity by doing so. Instead, I believe that putting more in helps better position me during a time where property values continue to rise. I can take that investment increase later on when I sell my home.”

Upgrading Your Personal Tech

  • Safe or Risky: Safe, if you can afford it

“There have been tremendous discounts on technology hardware and software during the pandemic, so I’ve focused on investing in upgrading technology and ensuring I have the right tools for my business and personal life,” said Steve Gickling, founder of ETLrobot. “This ability to invest in more technology has been a way to be ready for when the country reopens again and business picks up speed.”

Other Ways To Invest During the Pandemic

Your money is always a precious commodity, but especially so in today’s uncertain world. Beyond funds, stocks and financial accounts, here are a few more ways you can invest your funds right now.

Your Relationships

Since our ability to connect with our friends, family and extended network is more limited now, it’s more important than ever to consciously invest in our relationships.

“That could look like upgrading your Zoom account for a better experience when talking to someone or sending meaningful gifts to the people you care about,” said Chris Schembra, founder of 7:47. “Your success is determinant on the strength of your weak ties. Invest in your weak ties when times are tough, and they’ll provide referrals and loyalty when times are good again.”

Giving Back

“During the pandemic, it’s well worth investing your money in activities where you can help others,” said Gloria Horsley, co-founder of Open to Hope. “The return you get in providing others with much-needed assistance through stressful and uncertain times pays dividends in the form of greater satisfaction than purchasing material things. You get to see the results almost immediately. Plus, in a world where we feel a loss of control, actively helping others is a good way to get back that feeling of control.”

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Barbara Friedberg contributed to the reporting for this article.