The global pandemic by the COVID-19 virus has brought the whole world to a standstill. This is a testament to the negative investor sentiments across major markets in the world. This results into panic amongst individuals regarding their investments across markets. This includes mutual fund investments as well. Thus, investors are left to speculate whether they should be worried about their mutual fund investments.
Just like the rest of the world, India too is gripping to come out of this nightmare as quickly as possible. The central and the state government are doing the best they can to control the spread of this deadly virus. However, as citizens of this country, you need to do your part as well. You need to be responsible for your life – be it mentally, physically, or financially. Let’s focus on enriching our financial health amidst this pandemic.
Refrain from permitting short-term volatilities affect your investment portfolio
The markets usually recover from a steep crash over a period after a global pandemic. Do not believe us? Check the past records, history is a testament to that. The world witnessed similar trends during other global pandemics such as Swine flu, SARs, Ebola, The Great Depression of 1929, etc. If you conduct a careful and judicious research and analysis of the market, it would reveal that these bear market cycles are short-lived.
Hence, an investor should not get carried away with these short-term fluctuations in the market and continue to be dedicated to their investments.
This is an extension to the previous point. Before planning your asset allocation strategy for your investment portfolio, you might have mostly spent hours doing the research. Short-term volatilities in the market should not let you sway away from your goals and doubt your decisions. Additionally, you cannot ignore the fact that your asset allocation strategy has a huge role in determining the success rate of your mutual fund investments.
In case you have missed the bus to draft a financial plan for you due to some reason, you can still get back on track. This is the time to analyse your financial requirements and get started on financial planning.
If needed, consult a financial expert
In difficult times like these, you might consider getting the services of a financial expert who can give you professional advice about how to manage your mutual fund investments. Often experts advise their clients to stay put to their investments and refrain from exiting their schemes during such volatilities in the markets. This is because when you do so, you turn your notional loss into real losses. A financial advisor or an expert can prove to be extremely useful during such scenarios as they can calm you down and offer you sound advice.
Remember nobody got rich overnight. Successful investors and entrepreneurs take their sweet time to allow their investments to grow to their maximum potential. You need to do the same. The key to get out of these sticky situations is to show faith in your research and your investments. Happy investing!