By Omang Khurana January 25, 2021 In FINANCIAL PLANNING STRATEGIES

WealthOK’s 4 STEP STRATEGY TO MANAGE INVESTMENTS IN VOLATILITY WHEN SENSEX HAS TOUCHED 50,000 (PART 3/3)

[PART 3/3]: Where to Invest Your Profits Booked and How Customize it for your Needs?

In Part 1 & Part 2 of this blog thread we understood that we must book some of our profits while the market is at it all time high levels and we can park our money in liquid/overnight funds temporarily as we plan the re-investment of hard earned profits.

Let’s discuss the final 2 steps of our 4 Step Strategy to safeguard your wealth and take advantage of the correction phase.

STEP 3/4: INVEST IN A STAGGERED STYLE & INTERNATIONALLY TO TAKE ADVANTAGE OF THE CORRECTION PHASE (SIP with SWP)

Purchasing at an overvalued price can lead to short-term losses. To avoid this, plan your investments in balanced or arbitrage mutual funds over a horizon of 4 to 6 months. You should also consider investing in International Mutual Funds investing in developed economies to take advantage of GLOBAL DIVERSIFICATION with Tax Efficiency.
(CLICK HERE to read our blog on International Investing in Mutual Funds)

This must be done as systematic investments because the budget is around the corner in February 2021 and FY22 begins on 1st April 2021. This is one of the most uncertain phases of the year for the Indian economy. Traditionally, profit bookings are also at peek around the budget declaration and Financial Year endings, creating selling pressures causing market drops.

Thus, re-entering the market step-by-step will give you multiple opportunities to purchase when the selling pressures are high. This is applicable for stocks (price) as well as mutual funds (NAV).

A way to implement this is to start SIPs for your investments synced with SWPs from your liquid/overnight funds (Refer to part 2/3 if revision is needed).
SIP = Systematic Investment Plan | SWP = Systematic Withdrawal Plan

The Top 5 advantages of this strategy are:

  1. SIPs will average out the purchase price of all asset classes over the correction phase even slightly linked with equity.
  2. Money invested in liquid/overnight funds will offer higher gains than bank savings/current accounts.
  3. Investing in arbitrage/balanced funds will offer you the advantage equity growth along with the protection against market correction due to investments in debts.
  4. You will have a balanced risk profile offering you the best chance of achieving a growth that beats the inflation in the long-term.
  5. Investing Internationally will help you diversify your risk of being linked to a single volatile market.

STEP 4/4: GET IN TOUCH WITH A PROFESSIONAL WEALTH CONSULTANT TO CUSTOMIZE A SOLUTION FOR YOUR NEEDS & GOALS

The best way to be invested is to follow a financial solution CUSTOMIZED and Tailor-made for you. This way you will have constant hand-holding around the market volatility as well as the best chance of achieving your financial goals.

Also, the investment instruments in which you need to invest can be pin-pointed along with when & how much money to keep in what instrument.

To book a complimentary meeting with a Wealth Consultant (Chartered Wealth Manager) go to WealthOK.in and book an appointment.

CLICK HYPERLINKS for PART 1 & PART 2

Leave a reply