Finance

How to modify your investment portfolio during the coronavirus outbreak?

The corona virus pandemic has taken the world by storm. It is no surprise that the subject has creeped into every conversation that we hold today. While the affected countries are doing everything it takes to reduce its spread, it continues to prevail. The virus has impacted the society on different levels, including the health system, lifestyle, business and even economic markets.

Like the other pandemics that have been witness by the world, COVID-19 too has brushed its effect on the global financial markets. There have been sharp fluctuations in the past few weeks and if experts are to be believed, the trend will continue for a while. As an equity markets investor, you may not be able to help but be worried by the massive corrections in the SENSEX points. You are likely to consider more low risk-investments by swapping in your equity investments. Additionally, you may also wonder if it’s a good time to make fresh purchases, taking into account the drop in points.

There are several factors that can cloud your optimal approach. Read on to know some of best moves that you can make with your investment portfolio during these uncertain times:

Stay invested – A major dilemma that you are likely to face is whether you should redeem your stocks and re-enter at a later period. However, it is quite difficult to understand when the perfect time to re-enter the market. The major dips may make you feel like exiting now and securing your funds in other low-risk long term investments. However, it is best to stay put and be patient as the market comes out of this volatility. It is advised to spend time in the market rather than timing the market to be able to achieve the desired returns in the future.

Good time to increase your hold – It is a period of uncertainty and you are likely to think that it is best to avoid any new investments. However, it does make for a feasible time to add to your equity holdings if you have been planning to do so for a while. This essentially means that the low prices can be a good opportunity for you to rise to the level that you aspire. Adding to your equity portfolio when the markets are down can increase your chances of enjoying success through your investments over time.

Stay inactive if you must – A cash crunch is common during crisis such as a pandemic and you do not have to be concerned by the same. It is completely okay to not actively control your funds. You are likely to be worried by the constant activity of selling and buying among your acquaintances who make constant investments. However, you do not have to do it just become somebody else is doing so. You can definitely balance the same in the coming months through tax savings investments such as SIP. As the cash flow increases, you can aim to modify your current SIP and add another to increase the amount.

The history of the equity markets have proved that this is not the first time since the markets have witnessed a low. Over the years, there have been numerous instances and post every crash, the market has recovered at its own pace. The best course of action as an investor is to keep your eyes on the long term investments and not be carried away by the worry for immediate returns on investments. However, do not make uninformed choices and closely evaluate the market trends to ensure a steady sail through your investment journey.