In the past few weeks, there hasn’t been any good news for the financial markets; rather it is just getting worse with the increasing abnormalities in the world. A lot has happened since the beginning of this year and everything is impacting the financial market, be it US-Iran conflicts, a slowing economy, and now the outbreak of this pandemic coronavirus.
The question now arises for the routine investors, who invest very frequently in the market with a view to making money in the short term and with limited exposure. Due to increased volatility or uncertainty in the market, these investors are suffered the most.

It is advisable to these investors that they should keep track on the shares that are affected the least due to these situations and closely monitor them for some period and then invest in them. However, precautions like stop loss and target should be taken, especially during this time as it could turn out to be a nightmare if gone wrong.

Now, in these circumstances, it is better to invest with a long-term perspective. There have been instances in the past where severe market crashes have proved to be a good time to invest in stocks that are traded at bargain prices. Even the losses are short term as prices recover quickly and economic levels are restored again. So, your portfolio should be on that is liquid, invested preferably in growth assets that match with your risk profile. One thing that should be kept in mind while building such a portfolio is not to interfere with the savings kept aside for your near-term goals and household expenses.

All you have to do is to limit your equity exposure and leave some room for investment during market crashes.

Few points to be considered:

  • Find the total amount of your core portfolio after deducting the amounts for your emergency expense and near-term goal.
  • See the composition such as FDs, Liquid funds, ETFs, PPF, mutual funds, equity, etc.
  • Decide any extra amount to be infused, but limiting the equity.
  • If there’s any excess equity allocation than required, invest it in any other option.
  • Let your investment grows and takes timely actions to update your portfolio.
  • Make sure you give enough time to your investment to grow.