Covid-19 and your investment strategy post pandemic
I had shared my below mentioned thoughts on 25th July, 2019 but never wanted to become true....unfortunately, it is a reality within 9 months. Let us go through the old message of my past post once, before we proceed: "I personally sense that we are going to face hard times ahead, a sort of slow down & recession....Cut down all your expenses drastically.Survive only on basic mode. Postpone or drop all your WANTS and spend only on UTMOST NEEDS. Outing, Movies, Shopping, Dining / Drinking, Bday/Anniversary Parties, Get-together meets - ALL these can wait. Stay light, stay tight... Survival should be your utmost priority now."
So, what's my take now? Implement ruthlessly what was written 9 months ago. The importance of the Emergency Funds will be felt today as Cash is king now.
After-effects of this pandemic will be felt once this lock-down is over and the economy starts moving. Don't rush to Multiplexes / Restaurants / Shopping as soon your life limps back to normalcy. Hold onto your Cash. You might need to purchase some necessities to adapt yourself in post lock-down times. So, just wait...stay in hibernation.
Investment strategy :
Markets, both Debt & Equity, will be volatile and you will find some multibaggers at throw-away prices. While markets may not breach the recent low it will take at least 2 years to touch the all time high. Yes, while the markets will be in a fluctuating mode India will stand benefited by space left by China. So, selective industry will go up and some companies catering to luxury segment will find difficult to post good numbers.
Don't go blindly after Dividend Yield stocks as they too will have to pass the acid test in post pandemic scenario. Large Caps & Multi-cap Funds are recommended and stay away from Sectoral Funds. Balanced Advantage funds are expected to do well. Don't redeem your SIP / Equity Funds in panic and if not implemented, start following the Asset allocation strategy in your portfolio.Will keep you updated about the investment scenario. Don't Panic & Stay Safe.
(Manoj Garg can be reached on gargm09@yahoo.com)
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