Ever since the outbreak of the COVID 19 pandemic, India has been witnessing a major breakdown in the economy which has drastically hit almost all the segments of business leading to the highest rate of unemployment India has ever witnessed. Major companies in India like Larsen & Toubro, Bharat Forge, Ultra tech Cement, Grasim Industries, BHEL, Aditya Birla Group, and Tata motors have temporarily stopped their production.
The outbreak of the disease has caused fear among the people due to health concerns and bad Financial situations due to job loss and salary cuts in many organizations. Now there arises a situation where people have to make better investment strategies that help them to sustain until the COVID-19 situation comes to an end and the economy attains a stable situation.
Several Investment experts and Financial advisors have proposed certain Investment options that people should choose to make their investments to keep them secured and safe.
The Insurance coverage seems to be an important factor at this time of the pandemic. Every Individual should have sufficient health and life insurance cover. The IRDA (Insurance Regulatory and Development Authority) has made it mandatory for insurance companies to include the expenses of COVID –19 as a part of the health insurance plan. Considering the worst-case scenario of death of an individual due to Covid-19, life insurance will take care of the person’s liabilities.
A contingency fund or a savings fund for unexpected, or emergency situations is very much important at this time of the pandemic. A minimum of 6-12 months of household expenses should be kept either in savings banks or liquid mutual funds. At this time of the pandemic, Investments must be made considering the long-term prospects. This can be a good time for direct stock investors to invest in good quality stocks that have promising long-term prospects.
Equities can be made in Multicap and hybrid funds with a holding profile of low or no-debt companies so that they are better equipped to survive hard times. For diversification purposes, you can add some gold through Sovereign Gold Bonds (SGBs) or International funds in your Portfolio. After you have made provisions for an emergency, you can continue with the SIPs. SIP investors can get more units for the same amount bringing the average purchase price down which helps to increase the chance of avoiding losses and earning returns.
The investors are also moving to bank fixed deposits for safe and guaranteed returns. At this juncture, Investments should not be made in Small finance banks which provide higher interest rates and are very risky.
Also, the investment must be made considering CRISIL’s Rating and Credit quality of the funds. Always consider making Investments with an FAAA rating from CRISIL which indicates the highest safety and lowest investment risk.
