Amidst all this tariff war and market corrections, investors are worried and would be contemplating shifting to safe-haven assets. In such an environment, common investors are troubled by these questions the most: what to do now? How do I save my investment?
US President Donald Trump’s sweeping reciprocal tariffs on America’s trading partners have sent global equity markets tumbling. Trump announced far-reaching trade tariffs on major global economies—34% duty on imports from China, 26% on imports from India, and 20% on inward shipments from the European Union (EU). Apart from these three, several other major global economies have been slapped with high US tariffs.
Fearing inflationary impact and global recession, financial markets have gone into a tizzy. Many global equity markets closed with deep losses last week, the worst week since the COVID pandemic. Indian equity benchmarks, Sensex and Nifty, fell over 6% last week. On Monday (April 7), market mayhem continued, and both indices opened in the deep red, crashing over 5% each. Amidst all this tariff war and market corrections, investors are worried and would be contemplating shifting to safe-haven assets. In such an environment, common investors are troubled by these questions the most: what to do now? How do I save my investment?
1. Stay calm, don’t panic
It is natural for any investor to get nervous after seeing the kind of intense sell-offs in equities globally over the past one week, but remember – this is not forever. In the world of stock market, fall and rise are just like night after day. Those who play a waiting game and keep patience get benefited in the end. If you panic and sell everything today, then tomorrow when the market improves, you will regret it the most.
2. Be a long-haul player
Remember, you didn’t enter the market with a month or six-month target. Your investment is for 3 years or 5 years or even more. So why should you worry about the current fall then? Investors like Warren Buffet also advise to stay in the market and think long term. There will be ups and downs, but good shares and funds definitely give good returns with time.
3. Examine your portfolio
This is the time to ask yourself – are there stocks in your portfolio that are promising? Or are there some whose future is not clear? Stick to companies whose business is strong. But think again about those whose track record is shaky. Every fall shows a mirror – probably a good time to analyse your portfolio.
4. Investing through SIPs? Don’t stop
Stopping SIP in a falling market can be the biggest mistake. When the market is down, you get more units for the same amount – that means you are buying at a cheaper price. This is like shopping in a sale. In the long term, these units give good profits.
5. Don’t panic sell – this is a shortcut to loss
When the market falls, the most common reaction is – ‘sell everything’. But this often proves to be the biggest mistake. You end up making a real loss by selling at a price lower than the price at which you bought. Wait a bit, take a breath, then think.
6. A golden opportunity for investment is hidden in the fall
The fall in the stock market is like a discount sale. Stocks that were expensive earlier are now available cheap. If you are ready to take risks and have spare money, then this can be a good opportunity to start investing for the long term.
7. Keep an emergency fund – a safety net for you
The market is falling, and in the meantime, if any personal need arises – medical expenses, job loss or any emergency – are you prepared? At least 6 to 12 months of expenses should be in liquid form (FD, savings account or liquid fund). This will save you from touching your investments.
8. Understand your risk-taking capacity
If watching the market every day makes you feel bored or you are unable to sleep at night, then perhaps you have taken more risk than your capacity. Investment should be such that it gives peace to the mind, not restlessness. If needed, reduce equity, include balanced funds or debt instruments.
9. Consult an expert if need arises
You don’t have to find all the answers yourself. Sometimes a financial planner can show you the right direction. If you are confused about whether to stop SIP or not, which shares to sell, where to invest – then definitely consult an expert.
10. Don’t react to rumours on social media
Every day, headlines like ‘market crash’, ‘economic slowdown’ will run on channels and social media. But instead of getting scared of them, you have to stick to your strategy. Your plan, your goal and your time frame – these three things matter the most. Filter out the rest of the noise.
Summing up
Market fall is not good, but not that bad either – if you think in the right way. The fall can be a great opportunity for you to learn and become a better investor. Take decisions wisely, not in panic. Remember, the market does not remain down forever – but people who invest well always come out of it.
To receive your copy of FREE eBook on Financial Freedom Subscribe Here
This blog is purely for educational purposes. Mutual fund investments are subject to market risks, read all scheme-related documents carefully.
