COVID-19 VOLATILITY FOR AN MF INVESTOR

One needs to remain focused on long-term goals for correction is around the corner

- Himali Patel

On March 13, NSE Nifty saw a massive plunge hitting the 10 per cent lower circuit towards 85000 zones and marking a history for Indian bourses in twelve years. Market participants are concerned over the kind of economic damage the pandemic would lead to and would most likely weigh on the market for a while. Given the suddenness of plunge, it is difficult to predict the impact of COVID-19 or how soon normalcy would return. In the past with virus spreads like SARS, MERS, the economy and markets had returned to normal within months. However, COVID-19’s global spread suggests the effect may take a while.

“It is futile to predict market movements, but in the near-term the global economic impact will be really bad for various industries/ sectors. Hospitality, travel, airlines, discretionary goods, auto industry, you name it, will see a slowdown. As long as the fear is prevalent, markets will be volatile,” says Neil Parikh, CEO, PPFAS Mutual Fund. Although markets might take a while to recover from this significant price damage, the tailspin has spooked investors, who have started questioning their investment strategies. It is important to have a plan in place in case of a downturn. Further, investors should not let short-term market movements impact their longterm investments especially in mutual funds.