Hello Readers!
The crisis that the COVID-19 pandemic brought last year was all sudden. People were busy settling into the New Year, and Coronavirus struck. It was completely out of people’s mind reach that at the start of the year 2020, their finances would go through such turmoil.
As soon as the COVID-19 took control all over the world, a global pandemic was announced and countries including India went into a lockdown. People had to stay at home for a long time, many lost their jobs, some ran out of their finances. Those of us who had contingency plans or an emergency corpus survived. Those who had medical covers their finances were saved from the hospital and medicine bills.
If we talk about the market, it faced volatility on a high scale. With the start of the year 2020, it was trending high, but as soon as the pandemic took the roots, its impact was clearly visible on the market. The S&P BSE Sensex fell sharply by 38 percent between January and March in the year 2020.
What was the great news of 2020, was the sharp recovery of the market at the end of the year! From its lowest point to the end of the year, the Sensex rose 84 percent. Our finances were again in the race to grow. This was all about a year where investors were surprisingly hit by the pandemic when they were unprepared for it. Can we stay better prepared in 2021?
Here we are with the advice and tricks from some experts that you must follow to manage your portfolio in 2021.
The first advisor is Amol Joshi, founder of Plan Rupee Investment Managers. Mr. Joshi says that “Neither setbacks nor opportunities come announced. Just benefit from opportunities by staying invested. Do not lose sight of your long-term financial goals during short periods of volatility. Excess risk-taking as well as risk aversion, both have downsides. Instead, your asset allocation should guide you throughout your investment journey. Top-up your investments every year. The portfolio that you build over time across market cycles will ultimately lead to meeting expenses towards your life goals”.
Amol’s Investment mantras for 2021 are:
- Analyzing past returns is good but chasing them is bad. Regular review of the portfolio is prominent.
- SIP’s must be continued.
- Use equity for long-term goals
- Keep the number of funds to the minimum
- Have a plan ready. Work towards it over the years and modify it as things change.
The second financial expert is Pankaj Mathpal, founder of Optima Money Managers. Pankaj says, “Investors must review their portfolios, not only because it’s the beginning of the year 2021, but also because equity has delivered unexpectedly high returns in the last nine months. With the high trend in equity, the asset allocation among equity and other assets might not be the same as their original plans. So, investors should rebalance their portfolio based on their risk appetite and the objective of investment”.
Pankaj’s Investment mantras for 2021 are:
- Equity has outperformed but does not over-stuff your portfolio with equity funds.
- Asset allocation is the key to making your financial planning strategy successful
- Build a contingency fund. That is more important now than ever
- Prepay additional loan amount now if you had availed of the EMI moratorium
The third financial adviser is Mrin Agarwal, Founder of Finsafe India. Mrin says, “Choose products that are easy to understand, well-regulated, and transparent”. Further, she adds, “We are starting 2021 on a high. Equity markets – domestic and international – are at all-time highs, while interest rates have bottomed out. In this scenario, it is easy to get swayed by tips and hearsay. Create a financial plan, if not done already and always follow asset allocation”.
Mrin’s Investment mantras for 2021 are:
- Regularly review financial plans
- Do not chase trends.
- Seek expert advice for your finances.
- Don't consider products only based on past returns.
- Understand the amount of risk associated with the scheme before you invest.
The fourth financial expert is Deepak Chhabria, CEO, and director of Axiom Financial Services. Mr. Chhabria says, “If you want to restart your investment, don’t wait for Equity markets to dip”. He further adds, “The year 2020 has shown the importance of holding on to a financial asset. Investors who relied on fixed assets such as a real estate for rental incomes faced issues, as tenants vacated houses. First, monitor your investment portfolio. Second, re-balance if required. And third, do not for the equity market to dip if you want to restart investing. Start investing now through Systematic Investment Plan and grab the benefits of from rupee cost averaging, even if markets correct”.
Deepak’s investment mantras for 2021
- Don’t look to time equity markets.
- Don’t get carried away by new fund offers.
- Stick to your asset allocation; re-balance equity allocation when markets decline and vice-versa.
- Don’t overly depend on physical assets such as real estate.
Overall if we analyze then the basic mantra of investing is, chose plans as per your financial goals, and risk capacity. When your fund starts volatilizing, don’t panic, instead, trust your allocation and stick to your financial plan and goals. Keep reviewing your portfolio at intervals. That’s it!!
For any kind of query regarding financial planning you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee of future returns).