Financial markets across the globe have been hit by volatility, about five times more than normal, on the back of the COVID-19-induced health and economic concerns. Both the quantum and speed of the correction across equity markets, debt markets, and the Indian Rupee has left investors wondering what they should do next.
The anxieties will subside once the governments get better control – on both the spread of the virus as well as progress in finding a cure/vaccine. Things you should do meanwhile to protect your MF portfolio from pandemic and anxiety.
When you invested in a mutual fund scheme, you would have earmarked each of your mutual fund schemes to specific financial goals. For example, a retirement that is twenty years away or a higher education fund for a child that is eight years away. You need to remind yourself about why you invested, and therefore if you used equity mutual funds for long term goals, continue with investing towards those goals. Only if the goals are likely to fructify much sooner than originally planned, should you change your strategy
As per our assessments, investors should invest in a standardized and staggered manner. They can make use of tools for staggered investments like Systematic Investment Plans (SIP) and Systematic Transfer Plans (STPs). The biggest benefit of investing through a SIP and/or STP (Systematic Transfer Plan) is to get the benefit of rupee cost averaging. That is, getting more units when markets fall. As this opportunity has presented itself now with markets falling sharply, ensure this by continuing or enhancing your SIPs to truly benefit from rupee cost averaging.