Investment Strategy To Win Over #Corona निवेश बंद करो-ना


Finance Guru Speaks: You might be reading this special article when you are either confined to your Home or maintaining social distances from your colleagues, neighbors, etc. This article will discuss the Investment strategy which you can apply during these difficult times of the #Coronavirus or #Covid19 era.

Do not stop your Investments due to COVID19

All the major economies including India are experiencing quite challenging and unprecedented times. Covid-19 has had a major dent in the World Economies and Sectors like Aviation, Tourism, Event Management, Manufacturing, etc. At present, the entire World is thinking in the direction of stopping the spread of this deadly Virus. However, it is quite difficult at present to access its impact on the future growth of many Sectors and the livelihood of millions.

Now, coming back to the topic - why I thought of writing this article? 

As mentioned above, Coronavirus has devastated all the major Stock Markets around the World. All of a sudden, retail investors are witnessing negative growth in their portfolio. Its impact is not only confined to Equity (Shares and Equity Oriented Mutual Funds) but spread across safe investments like Gold. Due to the financial irregularities, the remaining portion of wealth destructions was contributed by the "safe" Debt Mutual Funds
In short, there is no respite to a common investor who started regular investments with the dreams of getting rich and wealthy.

Many of the retail investors went into panic mode and started selling their Mutual Funds which they have bought with the initial thoughts of "Long Term Investments (?)". A sudden financial wipe-out has shaken their ground and they are promising not to come back in Shares and Mutual Funds investments. Are you falling in this category of "Long Term" Investors? If yes, then continue to read this article else, you have sound fundamentals and principles of Wealth generation & at the end of this financial turmoil you will bounce back as a Hero.

Readers who wish to know the Investment Strategy can continue reading the remaining part of this article. Good luck!

Investment Strategy to follow to fight & win over your Wealth Destructive Corona:-


1. Don't STOP your regular investments or Mutual Funds SIPs. During good times, we have heard about Rupee-Cost Averaging and we smiled & appreciated the way it has grown our SIP Investments in the Excel Sheets. What does this principle states? It states that you buy Mutual Funds at cheaper NAVs when the Markets go down and buy at a higher price when the Markets go up. I am sure many of the young Investors joined the #MutualFunds rally post-2015 or 2018 when the Markets were going constantly upwards. So in practice, many of the new Investors have constantly accumulated the Mutual Funds Units at higher prices. Now, it's the time to buy Mutual Funds Units at lower prices. So why to waste this chance when you have marked yourself Long Term Investors instead of Mutual Funds Traders? So, do not commit the mistake of stopping your Monthly/Fortnightly/Weekly SIPs.


Financial Planning to fight Coronavirus


2. CASH is the KING in difficult times and falling Markets. As you are not stopping your regular Mutual Funds SIPs as mentioned in Point 1, make sure to avoid buying Direct Shares or Mutual Funds in bulk. You may think that you are buying at a cheaper rate, but trust me, you will see the same Share or Mutual Fund at lower prices the very Next day! So what is the solution?
If you feel to buy any fundamental Shares or good Mutual Funds, then buy at a slower pace. Divide your total investment amount into 4 to 5 portions and use only a single portion while buying Stocks or Mutual Funds at a time. You can follow Weekly, Bi-Weekly or Tri-Weekly frequency to accumulate & buy such quality Shares or Mutual Funds. So, go slow and make sure you have enough Cash to continue buying Equity at cheaper rates.

3. Don't TIME the Market. This is a very fundamental principle or concept of generating Wealth over a long period of time. Does anyone know the Bottom or Top of the Markets? Nobody does! So the best way is to keep investing on a regular basis and avoid timing the market. In this way, you can make full use of Compounding and Rupee-Cost-Averaging.


4. Don't SELL in panic. As you have read above Points, you might have understood this Strategy. Don't you? Now, you are getting a chance to accumulate the Mutual Funds Units at lower prices, so make full use of it. Don't panic and start selling your Mutual Funds. It may sound difficult, but its the way to accumulate Wealth and stay in the course of Financial Freedom.

Don't be a Mutual Funds Trader, but be a Long Term Investor.


Be a Mutual Fund Investor

5. NOT having enough Money to INVEST? Try Mutual Funds STP. In many of my previous articles, I have explained the concept of STP or Systematic Transfer Plan. Do you remember? I can explain again for the benefit of my new readers. Through STP, you can transfer the Units or Amount from your Debt Mutual Funds to Equity Mutual Funds (and Vice-Versa). As we are witnessing falling markets and cheap Equity units, it might be a wise strategy to start transferring a small amount of Money from Debt to Equity Mutual Funds preferably on a Weekly or Fortnightly basis. Use this period for accumulating Equity at cheaper prices using Mutual Funds STP. 

Follow the link to know about articles written on STPs - Articles on STP


STP in Mutual Funds

6. Book LOSS in Penny Shares or Non-Performing Mutual Funds. Now, this may sound strange to many of my readers! Why am I suggesting to SELL your Shares or Mutual Funds? 
The reason is to save your Taxes. Due to constant Market Bull Run and your Wealth accumulation, you might have held many bad quality Shares or Non-performing Mutual Funds as you were constantly ignoring their presence in your portfolio and booking the profits from your performing Stocks or Mutual Funds. Now, as the Financial Year End is approaching, it may be a wise decision to sell such bad quality of assets to adjust these losses against your Capital Gains. This way, you can save your Taxes as well as get rid of such poor Equity Stocks/Mutual Funds. So, Selling a poor quality of assets can also result in saving your Taxes.

7. Don't forget PPF or your Insurance Premium. During this course of financial turmoil, do remember to make your PPF Investment before the 5th of April, preferably in one-shot upto its maximum limit of 1.5 Lacs to earn the maximum interest. Don't skip investing in PPF and whatever amount possible, you invest in it. It is the safest option amongst Small Savings Scheme and you will enjoy Compounding benefits with Tax-free returns. Similarly, make sure to pay your Insurance premiums on time. Safety & Sure Returns are equally important to achieve Financial Independence.

This list can continue based on your response to this article. 😊

My intention is to keep you motivated during these difficult times and make the maximum use of this period. You may not fully agree with some of my above points, as we can have different investment styles and strategies. It is quite normal. Even if you don't agree, remember Fear and Greed principle.

Be Fearful when everyone is Greedy, Be Greedy when everyone is Fearful.
Do not Time the Market


Please help to Like, Share and Comment on this article over your Social Networks. I am sure you will appreciate my efforts and continue to stay on the path of achieving financial freedom. 


Stay Healthy, Stay Safe, Stay Wealthy!

4 comments:

  1. Thanks for the great article! I was kind of scared due to the market uncertainty, however, now I am confident and assured by reading your article that this is an opportunity to accumulate more in a disciplined way. Thank you again financial Guru and keep writing....

    ReplyDelete
    Replies
    1. Dear Reader,
      Thanks for your kind comments. Happy investing. Stay safe.

      Delete
  2. Very nicely written!!

    ReplyDelete

Thanks for your interest. Keep visiting.


Sincerely,
Finance guru Speaks

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