Mutual Fund Masters | Get rid of debt and build a robust emergency fund: Swarup Mohanty

The coronavirus pandemic has disrupted activities worldwide, affecting health, jobs, education, future goals, etc. What are the financial lessons that we have learnt and what should be our investment strategy post-Covid?

Swarup Mohanty, CEO, Mirae Asset Investment Managers, shared his views on the latest episode of Mutual Fund Masters.

“The first thing is that one must build a good emergency fund for the rainy days. Times are extremely uncertain and these funds can protect you from an uncalled for disaster. Secondly, it’s a great time to sit down and rejig your finances in way that your surpluses go up since there aren’t many opportunities to spend right now as we’re locked up. Cut down your wants and focus on the needs,” said Swarup Mohanty, CEO, Mirae Asset Investment Managers.

In spite of the fact that the second wave of Covid-19 has been far more deadly than the first, investors have not been rattled. This is in complete contrast from last year when the markets abruptly crashed as soon as the lockdown was imposed.

“Unlike in 2020, today we’re more aware of the problem in front of us. There is a vaccine available that wasn’t present last year. Investors have also learnt from the past when markets violently crashed. SIP investors have behaved incredibly well and surprised everyone by staying affix to their investment horizon . However, the same cannot be said about lump-sum investors who still seem to be momentum-driven,” Mohanty said.

He further said that in terms of equities, investors have gone a step ahead to align their investment horizons with that of the underlying asset. But the same cannot be said about debt funds.

“The debt fund investor is still very freckle and get influenced by the slightest of market volatility,” Mohanty added.