Now's the time to...

These are exciting times. Indian Equity markets benchmark Sensex had come off from 42000 to 26000, now sharply risen to 37000. The buzz is palpable, and making a quick buck seems rather easy. We present a three-point strategy on what investors must do now.

Cleanse your portfolio:

Remember that sure-fire stock tip your friend told you about. The hidden gem which was supposed to be the next big story, but never quite took off as expected. Instead, it ended up as one of your worst investments. Or that trendy thematic mutual fund which your broker promised would be the ticket to your financial nirvana. But sadly, the fund failed to deliver on the return front and your broker failed to return your calls when quizzed about its performance. Now is the time to cleanse your portfolio of such investments.

Rising markets provide the perfect opportunity to make up for incorrect investment decisions, and that too at a profit.

It is important that your investment portfolio is only made of avenues that are right for you (suited to your risk appetite) and that can help you achieve your life goals.

Review your asset allocation:

Asset allocation is evaluating how much to invest in which asset class like

> Equity

> Fixed Deposits/ bonds

> Gold

> Real estate, etc... according to your long term goals.

If you are investing in line with a predetermined investment plan, asset allocation would be at its core. Rising equity markets have perhaps resulted in you holding a higher-than-warranted portion of your portfolio in equity. This, in turn, can be a disaster when markets experience a downturn. Now is the time to review your asset allocation. Ask yourself- are your investment strategies diversified enough? The world is changing and so your portfolio needs to evolve to reflect the changes that are occurring. The benefit of this exercise is that you book profits and in the process, move a step closer to your goals.

Resist temptation:

Equity markets are surging north, the excitement is warranted, but financial security should be your priority. Don't be influenced by all noise around you. Now is the time to make sure that your portfolio will continue to perform both in good and bad time, behaves independently in spite of the market fluctuations. Continue to invest in line with your risk profile and investment plan.

Seems awfully boring, doesn't it? But then, while investing, boring is good. And those seeking excitement should take $800 and go to the casino in Las Vegas once we have the Corona vaccine. Do not forget to invite me!

Our approach should focus on the long term, the strategic plan that is personalized. The plan should be responsive to change and monitored often. Investment strategy should be grounded in long-term fundamentals with adjustments for today's markets. Make sure your investments maximize your gains while protecting your assets.

You may contact me in case you need to ask or tell me something. I am waiting to hear from you.

Stay home! Stay safe!

Thank you very much for your time!

With respect,
Aaditya Chhajed
CA, CFA(US) All Levels Cleared, MCom

E: chhajedaaditya@gmail.com
M: +91-9404055222.

Instagram: @chhajedaaditya

Aaditya is the founder of Aaditya Chhajed Financial Advisory Services, a Financial Planning and Wealth Management Firm.

He loves helping family, friends, and, clients make better financial decisions. He believes learning is perpetual.

He loves reading books, traveling around the world.

He is a commerce postgraduate and Chartered Accountant. He has also cleared all levels of CFA(US) in the first attempt.

Disclaimer:
Investors should seek the advice of their financial advisor prior to making any investment decision based on this report or for any necessary explanation of its contents. Future estimates mentioned herein are personal opinions and views of the author. This post is not a recommendation to buy or hold or sell securities. Investments are subject to market risks. Please read all scheme related documents carefully.

Comments

Nikhil Kothari said…

Congratulations fir youvr new venture.I m intrested to mi det in equity and commodity market.Plz guide me according to ghat.

July 18, 2020 at 2:44 PM

Unknown said…

Congratulations for the new venture. All the best.

July 18, 2020 at 4:55 PM

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