Things to Consider Before You Invest in the Indian Stock Market During Coronavirus
A lot of things have changed recently due to the coronavirus and its evident impact on the global stock market. A study done in April on the impact of COVID-19 on stock markets suggests that COVID-19 has a negative but short-term impact on the stock markets in certain countries. The impact on the Indian stock market has not been any different but in this case, the Reserve Bank of India (RBI) and the Government of India have come up with some reforms such as reductions of repo rate, regulatory relaxation by extending moratorium and several measures to boost liquidity in the system.
Some experienced investors would recommend investing in the stock market during this period and we have put together some things to consider as you get started.
1. Get a Financial Advisor
A financial investor is the first thing you should consider investing in, as they would help you put together a plan to ensure you invest your funds properly and get the best results. To get the best financial advisor, you must first know the type of financial advice you need; in this case, you need investment advisory services. You should also look for those with reputable credentials such as the CFP (Certified Financial Planner) or PFS (Personal Financial Specialist) designation, or even if it's the CFA (Chartered Financial Analyst) certificate. Verify their credentials and ask vital questions where necessary.
2. Invest Early
The timing and duration of your investments go a long way in determining the chances of your financial success and freedom. It allows you to put your finances in place and be disciplined about your spending habits, as you work closely with your budget and cut expenses wisely. This is also a way to get favorable compound interest over time, as you take advantage of the potential gains from it. So, while you wait for the best time to invest, you may want to start now regardless of the pandemic. Learnbonds explains in detail how to invest in stocks as a beginner if you are just starting afresh.
3. Expand Your Knowledge
To get the most of your investments, you must keep learning and get familiar with how the stock market operates and how you can maximize it. Do your extensive research, listen to experts, follow the news and trends to expand your knowledge and apply it to your investment strategy. Invest in yourself by taking out time to read books and articles on investments; you can also watch videos or take courses to that effect.
4. Diversify Your Assets
Every expert or experienced investor would tell you not to put all your eggs in one basket, which is especially important during this pandemic, as the stock market is quite uncertain. Building a mixed portfolio would help you not to lose all your capital at once. Consider adding mutual funds, fixed deposits, gold ETFs and government securities to create a good portfolio.
More people are taking out time to learn about the stock market but these key points should not be left out to help ensure you make the most of your investment.