INVESTMENT PLANNING FOR FYR 2020 ( COVID -19 CRISIS AND ITS IMPACT ON EARNINGS )

"An investment in knowledge pays the best interest." And When it comes to investing, nothing will pay off more than educating yourself.”

Lets understand the impact of crisis on our Earnings  in this Article.

While talking about “INVESTMENT”, we cannot detach the word “EARNINGS” from it. Hence the words Investment and Earnings are always interlinked.

We can categories the INVESTMENTS based upon the risk bearing capacity of the individual as follows:

a)    Risk Free Investments

b)    Moderate to high Risk Investments

RISK FREE INVESTMENTS:

 Over the period of time we have witnessed the fall in interest rate on Normal Investments  like Saving account , Fixed Deposits , PF, PPF , NSC, KVP, SSY etc  as the control over the same is monitored by the financial institutions under the garb of Reserve bank of India and its policy decisions, Repo, Reverse Repo and various other factors.

However, despite the above fall in interest rate it is always wise and advisable to invest your hard earned money into this category of investments during this Covid-19 Crises due to following reasons:

1)    Safety of Investments

2)    Risk Free Investments

3)    Fixed Earnings

4)    Depth of falling stock market cannot be predicted

5)    Recovery time post Covid- 19 crisis cannot be predicted

6)    Control over your money is in your hand.

7)    Various other factors.

So if you are thinking of risk free investments and want to play safe this is the ideal category for 2020 planning.

MODERATE TO HIGH RISK INVESTMENTS:

   “With every fall in stock market there comes an opportunity to earn”. How true this saying is today, during this COVID-19 Crisis and post crisis ?

Few questions need to retrospect before making such statement:

1)    Are you aware of the last level of falling market ?

2)    Are you capable of bearing the risk if further market falls?

3)    Are you thinking of earning in short term period ?

4)    Can you stay invested for minimum 6-10 years?

5)    Do you have ample emergency fund to meet your expenses for minimum 3 years invested in Risk free category?

If the answer to above is yes you can definitely think of investing in the falling market with a basic strategy of dividing your investment amount in five equal instalments and investing each instalment every week.

Further It is always better to invest in Equity mutual funds , ELSS , Large Cap Funds as the chances of recovery of these stocks is comparatively more once market improves and there is a probability of earnings.

So let me conclude by saying : “ Do a proper study, research, analysis before making any investments and do remember “ A long term success is far better than short term gambling with you hard earn money.

And do remember the words of JIM CRAMER  “ Every once a while the market does something so stupid it takes your breath away”. So always be prepared for ups and downs.

       ARTICLE BY

    CA. JATIN RATHOR

    (MOB 9595121481)

  (E-MAIL: cajatinrathor@gmail.com)

Please note :

1.     The above article is mere expression of opinion of the writer and does not in any way bind the writer in any mode or manner whatsoever.

2.      For any queries you can post a mail to the writer in the above mentioned email id.