- About Coverfox
It is true that struggle is the real teacher. But to help you through these tough times, we at Coverfox have a few important investment lessons that may come in use. During these difficult situations, it is important to go for an efficient investment plans that will secure your future. In such hardships, it is best to have a clear look at the fundamentals of the market and rely on them. Instead of speculative investments, we need to make better choices as per our financial requirements. We at Coverfox, advise you to take a traditional investment approach and make investments in mutual funds according to your risk appetite.
This can be a good time to analyze your mutual fund portfolio, and not every mutual fund scheme in your portfolio would be of good quality. So, you may have decided to make investments in mutual funds that are newer and unproven. If some of the mutual funds you invested in have taken a sharper fall than usual, then you may want to rethink your investment. You should consult a financial advisor on how to make good investments in mutual funds. They will guide you through the process of making important adjustments to your investments. They can choose which investments will stand the test of time and which should be sold in the near future. The advisors will also help you align your portfolio according to your financial goals and risk appetite. You can also count on Coverfox for such assistance. We ensure to provide expert advice.
Do not panic and just start selling. Because of the uncertainty in the market, stock prices are unstable. You will be selling your holdings at a lower price because shares are undervalued in the present situation. While you should be re-evaluating your investment portfolio, this does not mean you should sell all your investments in mutual funds.
The market will pick up again, and the value of your current holdings will be much more than it is in the current scenario. Therefore, it may be a better option to keep investing in mutual funds. And, if you have a regular source of income, then there is no reason for you to put a hold on investment.
This is the time when you can purchase high-quality stocks and mutual fund units at a fraction of their true value. While you should keep investing, make sure you invest in quality mutual funds only. Due to the increasing levels of credit risk in the market in India, it is recommended to keep a safe distance from debt mutual funds. Your investments in mutual funds should consist only of equity funds.
Consider looking at the international markets as well. Investments in mutual funds that hold global shares can be beneficial in difficult times. And under-performance in the Indian markets does not always mean there is under-performance in the international markets as well. This way, you can benefit from the rise in stock prices of global leaders. You have the choice of investing in mutual funds that hold such stocks. This will also protect you from unwanted ups and downs in the value of the Indian rupee. Invest According to the Term
While making a move to invest in mutual funds, it is always wise to think long-term. However, the market may be uncertain in the near future; there is a good chance that the Indian capital markets will witness sustained growth periods. While thinking long-term, your investments can help you reach the primary financial goals of your life, like your children's higher education, buying a home or a second home, and your retirement fund. You should consider value investments in mutual funds rather than speculative investments. While value investing, determine mutual funds that share your values and which you feel can provide the right amount of benefits in the long term. Make sure that the risk profile of these mutual funds suits your risk appetite. Diversify
This means you should have an asset allocation strategy. Your allocation to equity would depend on your risk profile and life cycle stage. Equity investment is not for the risk-averse or someone looking for a steady income in their old age. If you have Rs 100 to invest, a part of it must go into fixed income.
While your primary goal should be thinking of your long-term requirements, you can also make investments in mutual funds that are best suited to help you with your short-term goals. By short-term goals, we mean, goals that you want to fulfill in the near future, like renovating your home, buying a new car, renting office space, etc.
Note: Several mutual funds are geared towards providing short-term value. These mutual funds do not invest in the equity market. For short-term needs, we do not advise you to make investments in mutual funds that invest in equity since they take a much longer time to deliver value.
While investments in mutual funds are important, you should also collect money for emergencies. Having an emergency fund alongside your investments in mutual funds grants you a peaceful state of mind. This fund should be enough to take care of any medical or family emergencies that may occur. The size of your emergency fund should be enough to cover at least six months of living expenses. Do not use your emergency fund for any purpose other than actual emergencies. Having a separate emergency fund will help you have a better appetite for risk while making investments in mutual funds.
While you are locked down in your homes, you can still keep investing or make a fresh investment in a mutual fund scheme of your choice using the online methods. You can log into the online portal of the fund house of your choice or your bank account to access the investment section. Once there, you can select the fund, decide whether you wish to make a lumpsum investment, or want to start a systematic investment plan.
Even though it may seem like an unwarranted risk in these difficult times, you should not hold back from continuing to make investments in mutual funds if you have enough backup amount. You can buy mutual fund units at undervalued prices during such times, which can help you meet your financial goals in the long-term as well as short-term.
Coverfox not only ensures to give you the best reliable information but also makes sure you make beneficial investments by offering you expert advice. It comes with one main goal, i.e., to give you the best insurance and investment experience while you are at www.coverfox.com. Hassle-free process, quick access. Visit now!
The above-mentioned investment lessons from the coronavirus crisis can be very helpful to you if you are having trouble deciding where and how to invest. Read the full article. And we at Coverfox are always available in case of any assistance required regarding the investment and insurance issues. Make sure to visit www.coverfox.com.