Investments during the COVID 19
Investments during the COVID 19: Is it the right time?
COVID 19 pandemic has hit the world economy to an extent. Since March 2020, lockdown in most of the parts of the world has made a great impact on the economy for various reasons. The large, medium and small scale industries which are based on productions have continued to face hurdles due to lack of manpower, proper logistic facilities, improper supply of raw materials and so on. Amidst this crisis, the market value of so many companies have fallen to an extent and a few are struggling continuously. The market has become more volatile than before. So, people have become perplexed regarding investments during the COVID 19. It has become a common question among investors if this is the proper time for investing or not.
A report in the Hindustan Times shows that the 2nd wave of COVID 19 in India has caused more than 1 crore unemployment. The report says that the income of almost 97% of families has declined. The continuous recession has also made a strong impact on the overall scenario of investments in India. A major portion of Indian investors belongs to the middle class and lower-middle-class families. They invest in mutual funds and stocks for various reasons like family security, dream fulfilment, children’s future and education, etc. When they have continued to receive a cut of their income, it has really become hard for them to think of investment. So, the investment market is also facing a crisis resulting in the fall of the market for so many companies.
Now coming to the major point, YES this might be a good time for the prospective investors. When the market falls, the share value of most of the funds decreases. Hence if you invest right now, you have a high chance to gain in future. We hope that we would overcome the situation very soon and India would be able to fight the pandemic bravely. Most of the states have started unlocking the services of everything. The production has resumed, all the industries are gradually opening for the workers. The Indian government has been running the vaccination drive among the mass population rapidly and the active case is declining throughout the country. Hopefully the normalcy is going to be restored very soon.
The COVID 19 pandemic has provided us with the opportunity to work from home. Many of us are having plenty of time to go through sincere research of the market condition. This might help us to know the market better than before. We might search for alternative ways of investing now. Even amidst this COVID 19 situation, the market of few focussed mutual funds has proven to be stable and less volatile. If we have a glance at the focused equity mutual funds based on healthcare, logistics and technology, we can explore that they have recorded a proven rise since the advent of COVID 19 in 2020. So, a sincere investigation of the market is necessary before investing this time.
The investors who have already invested in several lockin funds like tax saving ELSS funds should keep their patience. They might be in the depression of the volatile nature of the market. They have to wait and watch to get the desired outcome or profit. As you might need liquid cash anytime for the treatment of family members, you should keep a handsome amount of liquid cash before investing in long term funds. If you have a regular flow of cash, you may invest without being much concerned. You may invest in an equity fund without a locking period that deducts very less percentage of expense ratio and exit load. This will help you to encash your investment when you feel emergency. For better advice for your investment strategies, you might consult an AMFI registered mutual fund distributor.
