Learn how to coronavirus-proof your retirement from stock market fall 2020.

Learn how to coronavirus-proof your retirement from stock market falls.

Indian stock market this month suffered their worst fall since 2008 due to Covid19 fears, worrying savers who have put away cash for retirement. So how can you protect your retirement from future stock market falls? We explain what you need to know.

How to corona virus-proof your retirement savings

1. Don’t panic

If you had invested in NPS with higher allocation to equity, you may find most of them are in negative or loss zone. Scheme Preference is the Pension fund schemes option chosen by the subscriber for investing the pension contribution amount. The three asset classes are

E = Equity

C = Corporate bonds and

G = Government Securities

If you save cash into a National Pension Scheme C or G where the provider invests your money in less risky asset class, you’ll likely see the value of your pension drop when stock markets fall.  But keep in mind that with retirement savings, you’re investing for the long-term so the drop in value isn’t likely to be permanent.

We have seen extremely volatile stock markets in recent weeks, dipping dramatically as coronavirus spread, bouncing back as central banks around the world promised stimulus in a bid to limit the impact on global growth and then crashing again as the US set out its response to the crisis.  While fear and worry is understandable, if you are saving in a pension fund you should be thinking in terms of decades rather than months or even years.

2. Change your asset allocation:  Never invest in risky funds such as small-cap/Mid-cap/thematic funds if you are nearing 50s as these fund falls much during market crash and take longer time to bounce back. An independent financial advisor will help you in choosing right fund selection based on your short-term or long-term goal.

3. Review your portfolio

If you’re still building up your retirement fund, you could use the stock market crash to review the investments you’ve made.

4. Diversify your investments

Another way to protect your retirement fund is by making sure you haven’t put all of your eggs in one basket. It’s worth diversifying your investments across different assets and different countries, so you aren’t a hostage to fortune of one region or industry.

For example, you may want to avoid investing only in the travel and hospitality industries right now given the impact coronavirus has had recently. Instead make sure you have a range of investments so they can protect you, or give you the chance to profit, from a range of different possible situations.

This could include gold, government bonds and whole-life insurance plans, which are unlikely to perform as well as shares but they are good at capital preservation. Capital preservation is an investment strategy where the primary goal is to preserve cash and prevent losses.

5. Try your luck and buy

This is risky, so it’s not suitable for everyone and only for those who can afford losses without damaging their standard of living. But market dips can be the cheapest time to buy if you are looking to invest over the longer term.

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Ask an experienced financial planner for guidance in determining how to manage your funds – and for exploring your options to generate reliable income. They can help you build a rock-solid strategy that lets you enjoy a predictable lifestyle for the long haul.

If you are looking for answers from a financial professional, help is a click away at www.AssuredGain.com

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