When you start your journey in personal finance with various investments and planning, many ups and downs in your investments take you on a ride! Economic and market slowdown has one such big influence!
At present, we are experiencing too much volatility in market and economy due to lower consumption demand, global market movements, sectoral slowdown particularly in auto sector , currency slowdown, crude prices movements etc. The government is trying to boost the economy with various measures planned to curb these slowdowns.
This will eventually settle down but till then you experience low/negative returns from your investments. Seeing your hard earned money going in red is a tough task. Also, many of you belong to private sector and due cost cutting measures, the security of employment also comes under question. But you need to apply some simple thoughts and measures when you look at your investments and personal finance during such testing times.
- Curb down your unwanted extra expenses: Going for a shopping every now and then, hoteling, enjoying outdoors with friends etc are all unwanted expenses. Money saved is money earned and during such times, you must curb on these expenses.
- Do not panic: Volatility is the core trait of the market and one must not panic when slowdown hits the market. Fluctuations come and eventually market gets stable and start to flourish.
- Don’t redeem your ongoing investments: People many a times stop their SIPs or redeem their investments due to fear of loosing money because of market risk and when their own job security is at stake. Please don’t touch your ongoing investment when you have assigned your long term goal to it. Market will eventually give you returns but such phases should not hamper your goals.
- Consider and stick to your asset allocation and re-balancing: One must invest as per asset allocation and re-balance his/her investment portfolio regularly. Due to market slowdowns, all market linked investments get lower in value where investments like FD, Gold etc give stable or better returns. One must re-balance appropriately and stick to decided asset allocation.
- Keep your emergency fund ready: When your job security comes under shadow of economic slowdown, one must have emergency fund ready to settle monthly expenses for minimum six months. This makes sure, you pay your routine bills well and on time and your investments not suffer due to any situation.
- Develop new skill sets: Private sector employments are subject to job insecurities due to stiff competition in the sectors and cost cutting measures to fight economic slowdown. One must develop new skill set to find an alternative source of income to face any bad situation.
Bad phases come and go, but its our right approach and well thought measures help us to fight them and win over!