Our View on the special health insurance policies available in the market. This article is published in the tamil magazine vikatan.com
Month: April 2020
Be Calm Check Balance the basics
The Covid-19 brings a lockdown to most of the services and almost all the offices are lockdown. The lockdown of 21 days since 21st Mar-2020 comes to an end today. However, the honorable prime minister Mr. Narendra Modi extended the lock down upto 3rd May – 2020.
What the investors can do during the Lock-down
Most of the employees may be working from home due to lockdown, however few of the employees who are working in the manufacturing division could not work from home. Any which way everyone may have some free time due to the avoidance of travel.
During this time, one can setright their finance by asking the below questions.
- Do I have an emergency fund equivalent of 6 months of my expenses.
If not, look at pulling money from EPF. The recent announcement by the finance minister allows an individual to withdraw the lower of 3 months’ salary or 75% of the corpus accumulated in the EPF as non-refundable loan.
- Do I have an individual medical Insurance
If not, we would recommend you to have a family floater policy for a minimum coverage of Rs.5 Lacs. This will ensure that even if your family’s health is safe even during job loss/job change.
- Do I have a Financial Plan
If not, it is an ideal time to have a financial plan to ensure that your cash flow is intact and debt is under control. This also ensures that the investments are routed towards the goals that may be short, medium or long term. This will also ensure that the market volatility doesn’t affect your goals if it is a planned investments.
- Did I Review the Portfolio & Asset Allocation
It is an ideal time to review your mutual fund portfolio to ensure that the portfolio is healthy enough to handle such a volatility and also does this being aligned to grow well along with the present market. The asset allocation is the key way to manage the volatility, it is the right time to check the asset allocation and if the allocation permits, add more towards equity if you have a long term goal.
- Shall I Continue Investments
We recommend the investors to continue the sip and stay invested. If you have lump sum, do it in a staggered manner over a period of 6 months.
It is the time to review your portfolio and rebalance the asset allocation. We recommend the investors not to invest lumpsum money in equity mutual funds. It is advisable to move the money into equity in a staggered manner. We recommend the investor to stay away from small cap right now as it takes a little long time for them to recover the losses incurred during the last 5 years.
Investors can look at investing in largecap focused funds and multicap funds that tend to provide a better return during the market recovery.
The YTM (Yield to Maturity) of the debt funds are shrinking and hence it is very difficult to get double digit return in the coming years. At this juncture, we recommend the investors to look at the funds that holds the portfolio in a AAA papers. We recommend the investors to look at short term funds with short maturity papers. We recommend corporate bonds, low duration, Savings and Ultra short-term funds.