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Monday, April 12, 2021

Trading amid Covid-19 crisis? Here are 5 tips for Indian investors

Are you fretting about trading amid Covid-19 crisis? Well, this is true for investors as equity and debt markets have been hit by the pandemic. But knowledge about market and patience can still ensure good returns.

Investing small amounts in different sectors is the key to enjoy the multiplier effect that the entire package can produce over a period of time, suggest experts.

Here’s the 5 essential tips on investing in uncertain market

1. Right understanding about market is the key. The equity market shows a gloomy picture, but at the same time, there is a good value in strong businesses. Therefore, maybe a bit flexibility is the need of the hour.

2. According to executive director and chief investment officer of HDFC Mutual Fund Prashant Jain, investors should not decide about their investments based on this year’s figures. Rather, they should focus on the FY22 financials. We all know that our judgments can be faulty during volatile times.

3. Large banks, oil, gas, PSU, telecom, cement, IT and pharma are some of the good sectors to invest in right now. We have seen in the past as well that large banks remain profitable after setbacks. You can try investing in these sectors while trading amid Covid-19 crisis.

4. Prime Minister Narendra Modi recently announced Rs 20 lakh crore stimulus package to combat the economic crisis. Migrant labourers, farmers, MSME, banks, aviation , defense and mining sectors received the major focus of the total package. According to experts, investors should position their portfolios in the sectors that found prime importance in the Centre’s announcement.

5. The idea is to have a top-approach, i.e. to start with the macro situation of the country, then proceed to a specific industry, and eventually to companies then. This is the bet remedy for your investment plan now.

Mutual Funds: A go-to guide during economic crisis

  • If you are investing in mutual funds through SIPs, then the best idea is to keep going on with your investments. When markets are low, you can buy more and more units with your SIP. The units will eventually raise their worth over a period of time.
  • Another major  benefit of mutual funds is that you can start or keep your monthly investments as low as Rs 500. Remember that SIP is your best bet in a falling market. Despite uncertainty, sticking to SIPs is always a good idea.

  • You can pause, cancel, or raise your SIP at any point of time. It as flexible/custom-made as you want it to be. Also, you can run SIPs in both equity and debt funds or choose either of these depending on your convenience.
  • If you are new to the world of investments, you may not be aware that several mutual funds houses offer SIPs embedded with life insurance cover. You can run your SIPs as regularly as you do, and you get an additional life cover for free.

We all know that these are hard times. Unemployment, lay offs, natural disasters and above all Covid-19 have crippled the world and its people badly over the past few months. Now it’s time to follow one day at a time mantra, both for our daily lives and our investment plans.

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