Hoping you all have looked at your investments and decided on your next course of action. I thought it is only fair that I share my investing journey with you at the end of these email series on 'what should you do with your Investments'. I have listed what I have been doing about my investments for the past couple of weeks.
1. I started investing in 2011 with the guidance of my colleagues and newspaper articles. Even for me, this is the first Market Crash where my entire investment portfolio is down by 27%.
It is said that an average investor faces 3 recessions and 1 depression in his life span of 75 years.
We all have to learn how to manage it and make the most of it.
2. This is the time where I can practically put to use everything that I have learnt and read about investments. I am trying my best to deal with the big notional loss in my portfolio, be ok about it and then do my asset allocation.
It is not easy but discussing my money decisions with my family helps me keep my emotions aside and make rational decisions about investing further.
3. Before Investing, let me tell you that I have my term & health insurance in place. I have my Emergency Fund kept aside in a liquid mutual fund which I am not touching. I also had 2 short term goal funds - Travel Fund (though not a priority for the next 1 year, but untouched) and my father's health fund (important right now, so untouched and safe)
4. How am I doing my Asset Allocation?
After ensuring my goals are secured, I set out to do my Asset Allocation.
As per my Risk Profile, I am a Balanced Profile, my Debt: Equity ratio is 50:50
As you can see from the above table, my Equity ratio is down to 36% and to rebalance my portfolio back to 50%, I have sold 14% of my total investments in Debt and started investing them in Equity in a staggered manner. Given that my Risk Profile is a Balanced Profile, I am investing in the Equity market to the extent I am comfortable as per my risk profile and investing it in a staggered manner given the uncertainty in the market. Also, I have been sticking to investing in Large Cap companies and good businesses rather than small-cap companies as I do not want to compound the risk exposure I have in equities. However, where you are an Aggressive Risk Profile, you could invest in small-cap & mid-cap Equity Mutual Funds to take advantage of the beaten-down markets.
'Be greedy when the times are fearful and be fearful when the markets are greedy'
Maintaining my asset allocation is making it easier for me to invest comfortably in the markets right now without letting the emotions take the best of me.
Lots of courage to every investor out there. Keep your cool and think rationally before you make any decisions.