How To Protect Your Investments in Volatile Markets

In today’s world, a major adverse event can come out of nowhere – a job loss, an economic downturn, or who knows, a pandemic? Most of these events are beyond our control, but we can mitigate their adverse impact on our finances if we are prepared for them. Let’s look at some tips to deal with the fluctuations that occur in a modern economy.
Sep 2022
5 mins read
Budget, budget and budget
Making and following a budget is the essential first step towards financial stability. Adhering to a budget demands discipline – one cannot make casual financial decisions and hope for the best. Budgeting helps you stay on top of your finances and keep track of your progress towards your goals, enhancing your financial resilience.

Control your expenses
Curbing your expenses can help you save more. Keeping track of your monthly outflows can help you detect areas of overspending and minimise them. Even small changes in routine, such as switching off an air-conditioner or heater when not in the room, can help reduce utility bills and boost your savings.

Clear your dues on time
Late fees or financing charges can creep up to become a massive portion of your expenses. For example, delaying your credit card or utility payment will attract penalties. Non-payment could also lead to your card getting cancelled at a time when you need it the most. Being well-organised can save you a substantial amount of money on monthly bills. Consider fixing a date every month to review your accounts so that you never miss any bill dues.

Get the right insurance coverage
Getting insured is the first part of your financial plan, and the key to securing your financial well-being in case of an adverse event. But don’t overspend on insurance – keep looking for options and consider switching to another provider at a better price. Buying a good, sustainable policy with disability cover can be helpful. You may also consider going for umbrella policies that provide coverage for areas other policies fail to cover.

Make your money work harder
Try to build up your sources of passive income. You could make investments that earn income without your active involvement, such as investing in equity, ELSS funds, gilt funds, debt funds or mutual funds. You might even look around for an asset you can monetise or sell belongings you no longer use. Some of this may not seem like a lot at first, but it all adds up!

Ultimately, keeping your finances/investments balanced won’t just help you prepare for adverse events, it will help you live happily. The same good habits that make you financially resilient will also help set you up for prosperity in future – so start developing them today!
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