Is It Right Time to Invest & Rebalance Your Portfolio

The current market scenario throws an opportunity for investors to rebalance their portfolio according to your goals and investment plan. Uncertainty is bad for the market but investors should utilize this to their advantage and rebalance the portfolio by dropping their non-performing or bad investment decision made when the market was inching higher with lots of hope with liquidity in the market.


Things to consider before you take any financial decision

1) Salaried professionals need to plan for their investment in the financial year 2020-2021, doing this at the start of the year is important to be taking your finances in control and avoid making any last-minute bad decisions just to avoid paying tax.

2) Firstly, have an emergency fund which is at least 6-8 months of your monthly expenses in this current scenario. If your planning to park this money in fixed deposits opt for banks that pay interest every month or quarterly this will help compound your money at a faster pace.

3) Do not skip your EMI, whether its home loans, personal loans or credit card payments reading into recent RBI announcement of the moratorium as it comes with some pain of paying more at a later stage of your repayment journey, can take this benefit only in case if cash crunch issues.

4) Your investments in fixed deposits, up for renewal in upcoming weeks have to be reviewed and invested in safe and strong banks/institutions unless your looking for that extra 0.5-0.75% higher interest rate deposits in smaller banks. Senior citizens should always invest with the safety of capital assuming these investments are there only emergency funds.

5) When thinking to invest your money, deploy only such amount which you can hold for at least the next 3-5 years. Do not pause your SIP or sell your mutual fund units at this time as long your salary is being credited, you can pause your SIP if there are cash issues but do sell your existing mutual fund units and make the virtual losses to a permanent one.

6) Investors who have invested in stocks, mutual funds have to review their portfolios. Sell if the stock/fund is doing really bad and future prospects look weak post this economic lifecycle changes, stock price correction should not be the criteria for investors to sell the stock or buy any stock. It has to be thoroughly understood whether it has near term problems to be faced or deviates from long term investment philosophy.

Always monitor your portfolio on a quarterly and yearly basis, which will help you to know where you stand to achieve your short term and long term goals. Do comment with your valuable suggestions and feedback.