ARTICLES

Ever since the COVID vaccine has been introduced, increasing numbers of individuals are queuing up to get themselves vaccinated so that they become immune to the virus. But have you ever wondered about financial immunity?

Financial immunity, in simple terms, means immunity from the financial upheavals of the market. Financial immunity protects your portfolio from market ups and downs. If you are a financially immune investor, you can remain unperturbed in any market movement. 

How can you, thus, improve your financial immunity?

Improving your financial immunity is quite easy actually. Here are some tips that you should inculcate in your financial behavior –

Determine your asset allocation based on your risk appetite and financial goals.

Have a long-term investment horizon. That way, market movements get averaged out with time and your investments do not suffer.

Diversify your portfolio across equity and debt. Equity would give attractive returns when the markets are positive and debt would stabilize the portfolio if the market becomes volatile.

Be patient with your investments. They would give returns if you have picked the right avenues.

Start a SIP and continue investing even if the market is volatile. Do not stop investing as your corpus would be affected. SIPs average out the effective NAV and give you the benefit of rupee cost averaging.

Create an emergency corpus with at least 6 months’ worth of your incomes allocated in liquid funds. This corpus would come to your aid if you need immediate funds and the market is not conducive for liquidating or redeeming your existing investments.

Regularly track and monitor your investment portfolio and align it with the market sentiments.

Be an asymptomatic investor who doesn’t show signs of panic, fear, or depression in adverse market movements because such investors have learned the art of financial immunity and made their portfolios immune to short-term changes. It is, therefore, time to make you financially immune to market swings too. Following the above-mentioned tips and vaccinate your portfolio against market upheavals for a financially free life.