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