Stimulus Checks: Why Buying Stock With Your Economic Impact Payment Is Beneficial

With many Americans having received their coronavirus relief stimulus checks, and some others still waiting, experts say there are some great benefits to buying stock with your economic impact payment. MarketWatch consulted a few different experts about the idea, and all of them had thoughts on what would be best.

Silvia Manent, the founder and managing partner of Manent Capital in Boston, told the outlet that she "would definitely invest it inequities" as she is "a long-term investor." Manent added, "Equities are down about 32 percent from all-time highs and it's important to slowly start taking advantage of this." One suggestion she said would be to invest small amounts on a weekly, bi-weekly or even monthly basis. "We may have more downside from here (nobody really knows) so it's important to be careful," she said.

Stephen Rischall, a financial adviser at Navalign is based in Encino, California said that if he were to receive a check, he would invest it "in good companies that I think are already benefiting, to some degree, from this pandemic — think of virtual learning and business cloud infrastructure, e-sports and video games, and grocery stores."

Eric Powell, founder of The Future Mill in Lakeland, Florida, had a different take, saying that he would not want stock pick. "I would be looking for an ETF that provides exposure to as many industries as possible," Powell said. "This provides a growth opportunity for the future, but also offsets the risk of buying into individual companies that may file for bankruptcy."

While investing your stimulus money is certainly one positive way to use it, MarketWatch notes that this option would be best used only after either adding it to an emergency fund or getting paid up on any outstanding debts. Jovan Johnson — founder and CEO of Piece of Wealth Planning in Atlanta, Georgia — told the outlet, I would immediately place this money in my emergency fund account, which is located in a high yield online savings account." Tara Unverzagt of South Bay Financial Partners in Torrance, California added, "If you feel confident that you won't be laid off any time soon and you don't have a contingency fund, you should put it there and start building it with every paycheck going forward. You could be next — be prepared." As far as paying debts are concerned, Chris Chen of Insight Financial Strategists in Newton, Massachusetts said, "Paying off credit cards would be a great way to get an immediate guaranteed return."