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Mutual Fund Investment in COVID-19 (Coronavirus) - ABSLMF Blog

Global Pandemic: Should you worry about your mutual fund investments?

Mar 13, 2020
3 mins | Views 10489

Amid the growing concerns of a COVID-19 outbreak across the world, it’s quite obvious to have an impact on the global economy, a fact being validated with the negative investor sentiment in major world markets.

India also may not be immune to both COVID-19 and the bearish stock market sentiment. With the central and state governments taking measures to control the impact of this epidemic, you must be responsible for yourself, and we’re not only talking about sanitizers and masks but your mutual fund portfolio as well.

Don’t let short-term market psychology define your portfolio

While it may sound a little mean to refer to other historic infections, but this isn’t the first time the markets have gone haywire after an epidemic. We encountered similar trends during Ebola, SARs, and even swine flu.

A careful analysis of market data reveals that these bear runs are often short-lived. It’s critical to note that China is a global production, manufacturing hub and plays a crucial role in the global supply chain. Hence, it’s only natural to feel these jitters across the world economy.

However, as an investor, you shouldn’t let a short-term event define or redefine your portfolio. The markets may bounce back, and that’s the only solace amid such uncertain times.

Stay put with your allocations

How did you allocate your investments? Hopefully, you have a goal-based portfolio allocation, where you may have invested in low-risk, conservative mutual fund schemes for short-term goals and moderate to aggressive funds for long-term goals.

If you put hours of research, planning, and had a strategy behind your portfolio allocations, there is no reason to doubt it now.

For those investors who missed this step the first time, it could be an ideal time to focus on your goals and choose mutual fund schemes that can help you achieve them.

Speak with a financial expert to calm your nerves

We understand that it’s a lot easier to extend advice than to follow it. We all have been there, and the only difference is who bails out and who stays put.

Somehow, if you’re anxious and want to pull out of your investments before losing any money, we recommend speaking with a financial expert. It’s only human to be afraid, especially when it comes to your money and financial future.

A financial advisor will help you understand what’s going on, what to expect over the next couple of weeks, and whether you should or shouldn’t take action. During periods of high market volatility, doing nothing isn’t a bad call!

Follow the age-old long-term growth vision

No one can emphasise this simple piece of wisdom enough, but we’re going to try.

We all know that even the world’s greatest investor alive took his time to grow. He didn’t bail out at the first sign of a recession, not even during the Great Recession of 2008, and that’s why he is a role model for investors across the globe.

Bottom Line

“This too shall pass!” ~ Persian Proverb

As a mutual fund investor, you’re quite likely to witness bear and bull cycles throughout your investment period. The key is to have faith in your allocations and stay put during chaotic market conditions.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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