Over the past few months, the global impact of COVID 19, popularly known as the novel coronavirus, on health, work, and economics has been in limelight. With partial and/or complete lockdown in more than 40 countries, investors all over the world are concerned about the market instability and market volatility as the rise of the virus continues.
When it comes to stock markets, often investors focus only on the upside potential of the share market and neglect the very fact that how quickly things can change and turn the market growth to negative.
As a wealth coach, wealth creator, money multiplier and money manager, we always think of the downside risk and allocate capital accordingly.
Here are a few ways you can avoid the contentment and design an investment portfolio built to withstand whatever market throws at you.
OUR FIRST NOVEL CORONAVIRUS TAKEWAY
UNDERSTAND YOUR INVESTMENT ALLOCATION
Often when markets are in an upward trajectory, everything seems good, but when markets get rough, panic selling or impulsive selling sets in. Panic leads to impulsive behaviour, impulsive behaviour leads to emotional investing, emotional investing leads to poor decisions, and poor decisions lead to poor investment outcomes.
Hence, it is recommended to take the time to understand what you own.
OUR SECOND NOVEL CORONAVIRUS TAKEWAY
DESIGN A DIVERSIFIED PORTFOLIO
A thoughtfully-planned and allocated portfolio will not entirely eliminate the feeling accompanied with negative markets, but it will allow you to navigate those moments confidently.
Hence, it is recommended to be proactive and not reactive. Set clear investment goals and ensure a proper mix of risk and conservative assets to meet your financial goals.
OUR THIRD NOVEL CORONAVIRUS TAKEWAY
HAVE EMERGENCY FUNDS AT PLACE
Often financial planner recommends keeping at least three to six months living expenses aside as an emergency fund. But rarely do we implement. These funds empower us to confidently face the throes of a crisis, like the pandemic of COVID-19. Having a healthy emergency fund is pretty much essential, as those who are losing their income/paychecks due to COVID-19 are, unfortunately, finding out the hard way to meet with their daily expenses.
OUR FOURTH NOVEL CORONAVIRUS TAKEWAY
DON’T FEAR THE MARKET FALL
To quote Warren Buffet, “Be fearful when others are greedy and greedy when others are fearful.”
Investments can’t take the place of emergency fund, so don’t fall back on it. The Novel Coronavirus crisis has caught millions of people globally by surprise, and it’s too soon to tell when things will be back to normal. It’s not the time panic and flow with emotional or impulsive selling decision. Hold on, and your investments sometime.
