Stay aligned to your investment goals
If you are investing for long-term goals such your children’s education or your retirement, the current market phase should not affect you.Updated: May 21, 2020 13:10 IST
The pandemic has affected not just our health, but also the economy, stock exchanges, health systems, job market, and our very existence. The interest rates have dropped as if to compete with the Sensex, which lost almost 25% recently. People in sectors such as civil aviation and hospitality are bearing the brunt. In such a scenario, it is natural for investors to be gripped with fear. Here, we have listed some tips for you to stay aligned to your investment goals.
Re-evaluate your investment goals
Essential and non-negotiable goals need to be strictly your focus now. If you are investing for long-term goals such as your children’s education or your retirement, the current market phase should not affect you. Ever since the market went into a correction mode, you may have deviated from your investment goals. If it is possible, you can infuse additional funds, or you may add a new SIP to your investment portfolio.
Stay away from risky bets
No matter what your risk appetite is, you should refrain from a buying spree in the equity market in the current scenario. And please do not go for any stock that you may not keep for the long term. Invest in good-quality stocks, gradually and preferably through a mutual fund. Avoid committing lump sum amounts, as one is not clear about the direction of the market in the near term. It is advisable to invest through the SIP route to get the best from rupee cost averaging.
Liquidity is of paramount importance
Job loss and salary cuts may be a reality for some. The situation being grim, you may have to face a financial crisis for some time. It is recommended that you make a provision for at least six months of expenses ready with you. But rather than keeping this money idle, you should invest in liquid funds with a reputed mutual fund. Liquid funds offer the advantage of easy withdrawal while giving you decent returns.
Assets you can liquidate
Make a list of assets you can liquidate. You may need to liquidate a few assets in case you are hit with a job loss, pay cut, or if your salary is delayed because of the pandemic. Go for those that are not aligned to some critical goals. And please refrain from taking loans against your assets.
Give your investments time to ride through this rough patch. Every such phase in the past has helped intelligent and disciplined investors to gain from future growth. Being patient and focused on your key goals is a responsible strategy for now. So, stay responsible and stay invested!