Covid-19 2.0 taught some financial lessons, always remember

This year, when everything seemed to be returning to normal, then the second wave of Corona knocked. Although the government tried its best to help the people troubled by this second wave of the pandemic, the second blow of this pandemic has left behind a lot for us to learn. This lesson is not only telling us ways to strengthen our financial position, but it has also been taught us the qualities to emerge from any such setbacks in future.

The fruit of patience is sweet

The first lesson we learn from this shock is that the fruit of patience is sweet. After the first wave of Corona, we did not get to see the effect of sudden shock to the market in its second wave. The market seems to be putting us on highs continuously. This teaches us that long-term investments in equities are often rewarding.

It is not the right strategy to panic and exit the market in case of a sudden bad situation. During the first shock of Corona in March 2020, the market saw a huge drop and most of the investors panicked and exited the market converting their notional loss into real loss. Those who remain in the market even in these bad times are in big advantage today. So we should invest in equities with patience for long term.

don’t expect too much

With the progress of vaccination, there has been an excessive expectation among many people and they feel that the danger is completely averted but the truth is not. Corona is still among us and we must follow all the safety protocols. Same is the case with equity market which has given us strong returns but now the possibility of a near term correction cannot be ruled out.

The market has become very hot, now it also needs to cool down a bit. Hence, you should not expect very high returns from your portfolio now. Investors are advised to stick to a SIP plan to avoid heavy market volatility and take advantage of Rupee Cost Averaging.

Do not rely on market tips

During the Corona epidemic, all the social media were seen floating on social media to deal with the virus. All of these methods are such that adopting them can increase all your troubles. This lesson also applies to the market. In the event of a boom in the market, we get to see a slew of profitable bets and tips. Investors are advised to stay away from such advice. Even the most knowledgeable investor cannot predict the movement of the market, so stick to the time tested strategy of choosing quality stocks in the market and staying in them for a long time. Don’t try to tie the market. Keep in mind that the longer you stay in the market to win, the more likely you are to profit.

Now the effect of the second wave of Corona seems to be over. The economy also seems to be on track. In such a situation, it is expected that the market will be seen achieving new heights in the coming days. In such a situation, prudence and disciplined investment will be the basic mantra to take you on the path of financial prosperity.

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