As a result of the global epidemic that was triggered by the coronavirus, the financial markets have been hit hard by significant corrections. Investors’ convictions have been shaken as a consequence of this, as well as the countrywide lockdown and the sluggish economic development, and they have therefore given in to feelings of fear as a result. In light of the aforementioned, it is strongly suggested that investors gain an understanding of the notion of market volatility by looking at historical data, namely the years 2008 and 2011, which had market corrections that were comparable to one another.
During the current market conditions, an astute investor should take into consideration the following:
One should give some thought to the establishment of an emergency fund in order to prepare for any unanticipated costs that may arise as a result of unforeseen events, such as the loss of one’s work or a delay in receiving one’s pay, as well as unexpected medical bills.
Performing an analysis of the asset allocation of your investment portfolio, making certain that it is in accordance with your personal investment strategy, and making prudent decisions in light of your current financial needs, level of risk tolerance, and time horizon for investment are all important steps.
Avoid getting caught up in a selling frenzy and don’t sit on the sidelines waiting for the ideal moment to enter the market. Those individuals who want to take advantage of market volatility while still allocating their assets in accordance with their investing goals may decide to view the current situation as an opportunity.
Continue making contributions using a Systematic Investment Plan (SIP) since this type of plan offers rupee cost averaging, which helps to keep your costs consistent over the course of an investment’s duration.
You may invest in liquid funds to build up an emergency fund over time if you are an investor with a reasonably moderate risk appetite. These funds allow you to lodge any excess cash and provide you the option to choose a quick withdrawal facility, which is offered by some mutual fund companies. This option gives the investor the ability to withdraw a certain amount of money, which is then deposited into the investor’s bank account within a few hours of redeeming the security. Additionally, if the money is removed from the fund within seven days after the first deposit, there will be no charge for an exit load. If investors want further information on the process of redeeming their units in a specific liquid mutual fund scheme, they should read the Scheme Information Document, often known as the SID.
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Learn more about the Know Your Customer (KYC) need and how to fulfil it by going to www.icicipruamc.com/note. This is a one-time requirement that must be met in order to invest in mutual funds. Only registered mutual funds, the information about which can be checked on the SEBI website at www.sebi.gov.in/intermediaries.html, should be transacted with by investors. Investors can contact the Asset Management Companies (AMCs) and/or the Investor Relations Officers if they have any questions, concerns, or other issues that need to be resolved. If an investor is unhappy with the solutions provided by an asset management company (AMC), they have another option: they may file a complaint online at https://scores.gov.in. The SCORES site makes it possible for you to file an online complaint with SEBI and then check the progress of that complaint afterwards.