If the industry predictions are any indication, then the COVID -19 is expected to hit the economic landscape of the developing countries hard. Given the worsening condition around the globe, a recession is likely to impact the financial market, causing millions to lose their job.
Experts have even claimed that the extent of financial damage and recession is difficult to predict. However, as the economy slows down, there is every reason to plan your finances well in advance to cushion the shock and prevent any long-term damage.
The good news is that even though the coronavirus pandemic is exceptional for us, the markets are not exactly alien to this crisis. However, the markets have survived wars, terror attacks, and natural disasters, only to bounce back stronger several times in the history.
Fortunately, you can do multiple things to safeguard your finances and stabilize your investments. Things like developing a robust investment plan and doing away with high-interest debts are one of the few things to get a head start.
Not many people know this, but the COVID -19 lockdown period and the uncertain economic slowdown is actually a good time to build the best investment plan and rebalance your portfolio by checking the performance of various financial products.
Follow these steps to achieve your long-term financial goals and secure your investments during unpredictable times:
- Plan, Plan, Plan
Before you start considering an investment plan, always remember to plan. It is crucial because that way, you will know the purpose of your investment and have the clarity to know how much money to invest.
According to financial experts, investment should be made after thorough research. You must only invest in the instruments that you can easily understand. If you are a first-time investor, then you must ask about the types of investment from a financial advisor so that you can layout a robust map before you start investing. Given the current times, planning your investments will not only protect you in the short term but also keep your long-term benefits secure.
- Start early
If you haven’t started investing in an investment plan, now is a good time as any to think about it seriously. When you start investing early, you not only benefit from the power of compounding but also be able to accumulate considerable wealth over time.
However, if you have already invested in different assets in the past, then don’t obsess over the loss in value of your investments. Don’t forget that there is a crucial difference between wealth and income. The wealth is accumulated over a lifetime of staying invested. It is the reason you must choose the right instruments so that you can benefit from facilities like partial withdrawal when you are faced with such unprecedented times.
- Take calculated risks
If you want to earn high rewards, then you must take some risks. However, do not tread on unfamiliar territory in the name of higher returns. At a time when people in the whole world are witnessing an abnormal situation, it is advisable to refrain from taking ambitious investment decisions.
For instance, if you are planning to add ULIPs to your investment plan, then choose your asset allocation wisely and stick to low-risk instruments in the face of volatile markets. You can also invest in low return instruments such as FDs to earn an interest income. At the same time, you must retain your cash volumes and stay liquid at this time so that you can manage your household expenses and medications with ease.
- Choose between short term and long-term investments wisely
The global COVID -19 pandemic has not only brought the world to its knees but also resulted in millions of people losing their jobs. In such a scenario, you should focus on keeping an emergency corpus of funds that can be used to fulfil immediate financial needs.
However, you must also define your long-term goals to ensure that the future of your loved ones is secure too, should something happen to you. Remember not to mix these investments as you may end up missing both your goals.
- Invest in thriving stocks
Another thing you can add to your investment plan is prospering stocks. Financial experts claim that this is perhaps the best time to put your money down on stocks, especially in the health and pharma sectors, as they are racing to develop the first coronavirus vaccine. Even the stock of companies making PPE kits, sanitizers, and masks have gone up exponentially due to their rising demand. At the same time, stocks of travel companies and airlines have witnessed a decline. So choose the stocks that are likely to stay afloat during the pandemic and ahead.
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