Have you made these financial decisions this year?

This year has been a rollercoaster for the financial markets. With so many regulations and changes in the Mutual Fund industry, the fund’s performances have been extremely volatile. The most important aspect to keep in mind is no period lasts forever. So is the case with the crisis, the phase isn’t permanent. A bull market phase always follows a bear market phase. Did you make the following financial decisions that would have helped you ride the volatile market?

No Panic Selling

This is one of the most common financial decisions made by the investors. In the past couple of months, they would have taken decisions to sell their investments considering the market volatility. However, hope you weren’t one of them. A well-diversified portfolio across different market caps works in your favor even during adverse market conditions. It is during this period that you can reap the benefits of SIP investing, when the markets are low you are able to get a higher number of units of the fund. And when the market recovers, you’ll be benefitting from these higher units. A potential upside that the funds would offer post the bear phase is lost if you are not able to withstand the fall and sold your investments.

Goal-based investing

Investing towards specific goals will help you hold onto your investments until you achieve them. The two biggest advantages of goal-based investing, are

  • Goals make it far more likely you’ll save for—and achieve— every one of your goals. When you can attach a real outcome to the purpose of your saving, you’re more likely to work towards that goal rather than blind saving, and
  • it reduces human errors such as impulsive decision-making and overreaction.

Even during market volatility, you will be motivated to hold on to your investment as you have a predefined goal and horizon attached to it.

Buying an insurance

Insurance is an important aspect of financial planning. Do not consider insurance as an investment. It is financial assistance to a family in case of any unforeseen emergencies. Insurance needs differ from one individual to another. The type and cover of insurance required by an individual depend on a lot of factors like the income, family size and requirements, lifestyle, profession, and professional risks.


If you haven’t made the above financial decisions this year, at least next year have a well-planned investment approach based on your risk appetite and goals. To be able to stay up with the market volatility a well thought financial planning is required. Decisions based on short-term occurrences might be costly. Most investors make financial decisions based on short-term performance. During these short-term occurrences, do not stop your existing SIPs or withdraw money from your investments as the markets would definitely bounce back. Avoid over diversifying your investments as these would eat up your returns. Be selective while investing, choose the right investments based on your need. Avoid mistakes and have a planned investment strategy.

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