Investment in Difficult Times

11 Dec 2022

Today i am going to talk on the subject of investing in uncertain times ever since covid hit many countries there has been several news items spreading about slow down in the economy, loss of jobs and many businesses closing down on account of issues pertaining to lockdown.

In this connection lots of people have asked how to go about while investing there are many people who are regular investors, who are contributing systematic investment plan for the last so many years their question was when the market is down, what should they do the?

Simple answer was as long as you're able to sustain and you're able to contribute for systematic investment plan, i felt that you should continue your savings and investment plans. However, if you are unable to contribute for some reason and if your income has got a hit and if your savings have come down then probably you can also bring down your investment to 50 or 40 percent.

As the case may be in some situation when salary itself has not come, i have been suggesting that you can take a pause for three months till such time situation shows marked improvement.

So, there are several people asking for advice in this scenario what is better which asset class will perform and where to put in our money. I always say that you should not change your goals, you should not change your methodology of saving or investing just because of covid you have to continue your saving pattern investment pattern and take it forward as much as possible.

We will take this as a passing time and i hope things will be far superior in mid 2023. There are also lots of questions on investing in gold investing in real estate investing in other asset classes as compared to equity as far as gold is concerned because of uncertainty across the globe the price of gold is shot up, it is shot up in the New York exchange and hence everywhere we are seeing gold price shooting up.

Now the question comes should i put money in the gold? I always said that you must put 10 percent of your overall portfolio in gold at any point of time and nothing more but then chasing returns and thinking that gold alone will give you returns it's not a right method of investing. So i always feel that you must continue to put 10 percent across in the gold and leave it.

We have seen in the past 2013 to 2018 gold has given not only negative returns it has given zero returns so this is the time gold recovers and again maybe one more year it can give returns and probably it will come down again so please be prepared for that.

As far as Real Estate is concerned don't take a extreme step of buying property today because this is not the time to look at Real Estate the prices will fall further and interest rates are also falling. So we can take advantage early next year.

So real estate is a place where you can take advantage maybe early next year and not now

So having said that definitely your continuation in mutual fund equity is a great methodology of taking things forward and you can look at debt funds.

In case you are not satisfied with your bank deposit interest rates, so you need to have strong conviction to invest in mutual fund whether in debt or in equity on a longer duration.

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