The new financial year has started on an uncertain note of a kind that no one has dealt before, the effects of the pandemic are felt across jobs, livelihoods and the entire economy. The markets have crashed so are our investments, March 2020 will go down in the history as one of the worst months destroying livelihoods and wealth. Given this scenario how do we face this crisis in relation to our personal finances?
We are in midst of a problem that has not yet fully unraveled itself. We are not able to gauge the full impact of the pandemic on the world economy. In such times the best investment strategy is stay where you are as in the past. Continue with the plan as before the pandemic. This is not the time for changing your investment plan. Sometimes doing nothing, choosing to wait, thinking through and taking measured action yields greater value.
The mutual fund portfolio for this month would show losses, it’s difficult to fathom these, but given the current situation it’s better to ignore them, markets should bounce back once the pandemic scare is handled effectively in the coming months.
This waiting time can be utilized to complete some important tasks, we would suggest you make a WILL, will send you the format in a separate mail as an attachment,
focus on emergency funds – plan to set aside three to six months of expenses in your SB accounts, flexi deposits, bank FDs, liquid funds
Based on your cash flows, after setting aside emergency funds, continue paying EMIs though RBI has given three months moratorium, please pay off your Credit card dues, EMIs on personal loans, car loans and home loans as before. Don’t stop unless and until there are cash flow issues, even then please pay off your credit card dues as the interest rates charged are higher compared to other loans