Corona Virus time has proved a challenging time for everyone and we all have learnt investment lessons during Corona.
In this post we will talk about the greatest lessons that covid-19 pandemic has taught to us,which can never be ignored by anyone.
Table of Contents
Investment lesson 1. during Coronavirus-Liquid Money
One of the biggest problem faced by people is job loss, income loss due to covid-19.
People are in panic due to Corona as well as for their day-to-day expenses also.
For instance,some people are quite well off with lot of liquid money in hand while some have money but they have invested in such a way that they can’t take out money from their investments.
As a result they are facing a difficult time.
Therefore,it becomes very important to make your investments in such a way that you can withdraw your money in need.
Here, emergency fund/contingency fund plays a very significant role in people’s life.
You may say, I have other investments than what’s the need of So-called emergency fund.
As of now, you may withdraw from your existing investments but you may lose on interest part and the compounding effect of your Investments also.
There may be chances that you may have to pay penalties for the same.
Tip : Always keep a separate emergency fund for at least 6 months expenses which include your day to day expenses, your EMI, payments, instalments etc.
Investment lesson 2. during
Coronavirus
– Medical Insurance
Till now recovery rate is good in India but covid-19 has been proved fatal for many and they have to be hospitalised due to it.
Those who are hospitalised have got huge medical bills.
Although they have medical insurance in place but the cover bought is quite low.
Most importantly, people buy Health Insurance covered in tune of 5 to 10 lakh only.
But is it sufficient?
Certainly high cover means high on premium also and this is the main reason why people do not go for high sum assured medical insurance plans.
If it is so, then what’s the way out
As of now many companies have launched Corona Kavach plans to Compensate the high medical cost due to Corona.
https://www.youtube.com/watch?v=BN9KiLJUmDY
Additionally one can buy top up or super top up Health Insurance coverage plans.
These plans can significantly increase the sum assured without hampering your pocket.
These plans are cheaper as compared to the basic Health Insurance plans.
Tip: Buy a base medical health cover plan and add super top up health cover.
Investment lesson 3. during Covid-19 –
Diversification & Asset Allocation
Do not put all your eggs in one basket
You must have heard this before also.
Usually people are in love with one asset class.While few are fond of real estate, some for mutual fund, some are made for Life Insurance FD and so on. The list is endless.
I have myself seen people practically having more than 50-60 policies or only risky mutual funds,a lot of real estate also.
The question arises again what if the need arises.
Will you be able to sell and get money immediately?.
What if you required a small amount of money,obviously not too small also and what if your return decreased significantly and you are in dire need of money.
Here the answer lies in diversification and asset allocation.
Firstly you should divide your investment in different asset classes such as equity, mutual fund, fixed income instruments, commodities,gold, real estate etc.
You know how boring it becomes if we wear the same type of clothes daily.
We want variety in our day to day living then why not variety in investments too.( I mean diversification).
Tip: Diversify your investments.
Investment lesson 4. during Corona-
– Life insurance
There are families who lost their bread earners during this difficult time.
Although emotional losses can never be recovered but no one wants their family to suffer, atleast for their daily requirements.
Therefore it is essential to buy adequate life insurance cover in such a way that interest of money can cover family’s basic day to day expenses.
You can buy high term insurance to cover from such a loss also.
There is more than 20% surge in purchasing of Term plan right now.
Demand has increased substantially these days and the issuance of policy slow, really slow.
https://bestinvestindia.com/mf-vs-insurance/
Time reaction can act as a Shield to your family.
Investment lesson 5. during Covid
Herd mentality
It has been almost four/five months since all this has started in India.
People who sold their investments in mutual funds/ other instruments in hurry and who stopped Investments are now repenting.
Markets have corrected significantly now, so here the learning is to stop taking action in hurry and do not follow the herd mentality.
secondly it is wise to consult a Financial Advisor at least before taking such actions.
Additional Read
https://bestinvestindia.com/how-to-withdraw-sell-exit-mutual-fund/
Conclusion
Every situation, good or bad make us learn some really good learning of life.
It all depends on you, take it or leave it.
But this is the time to act prudently and smartly with your life and with your investments too.
