Amidst the growing concern of a pandemic hitting the entire world, COVID-19 has drastically impacted the global economy, a fact that is validated with the negative investor sentiment across major world markets. This calls for panic amongst most investors regarding their mutual fund investments.
India, like the rest of the world isn’t immune to both the pandemic and the bearish market sentiments. With the central and state government trying to limit the spread and growth of this deadly virus, you, as an individual, must be responsible for yourself. And no, we are not just talking about your physical and mental health, but your financial health as well. Here’s how you can ensure your financial health and your mutual fund portfolio during a pandemic:
Don’t allow short-term market psychology to define your portfolio
History is proof that this isn’t the first time the markets have gone haywire after a global epidemic. The world has encountered similar trends during SARs, Ebola, and even Swine flu. A careful analysis of market data discloses that these bear runs are usually short-lived.
Hence, as an investor, you should not permit these short-term events to define or re-define your folio. The markets may bounce back and that’s the only comfort amid such ambiguous times.
Stay put with your investments
Your allocations play a major role in your investments. If you have a goal-based portfolio allocation then you may have invested in conservative, low-risk funds for short-term goals and moderate to aggressive funds for long-term goals.
If you have invested hours of research and planning behind your portfolio allocation, there’s no reason to doubt it now.
In case, you had missed the first step, this is a good time to consider your goals and begin with your mutual fund investments that aids to achieve these goals.
Talk to a financial expert
Sure, it’s easier to extend advice than following it. You should try to refrain from pulling out your investments, as this will only make your losses permanent. However, if you are still anxious to pull out your investments, we highly recommend talking with a financial advisor first. A financial expert would guide you on the current situation, what to expect in the coming few weeks, and whether you should go forward with your decision or not. A financial advisor will help you to keep your calm during these times of uncertainty. Always remember, during phases of high market volatility, it isn’t bad to do nothing at all!
Try following the age-old saying of long-term growth vision
Even the world’s greatest investor didn’t become rich overnight. He/She took their sweet time to invest in mutual funds and let them grow. They didn’t bail out at the earliest signs of recession, not even during the Great Recession of 2008! Hence, they are role models to investors across the globe.
As a mutual fund investor, you are likely to witness bull and bear market cycles, irrespective of the type of mutual fund you have invested in- be it equity funds, debt funds, or hybrid funds.The key is to have faith in your investments and stay put during such chaotic times. Happy investing!