Should You Be Jittery About Your Retirement Plan Due To A Roller Coaster Stock Market?

Sharp swings in the equity market can unsettle even disciplined investors nearing their retirement. If you are feeling jittery due to a highly volatile equity market, you need to calm down and take cautious steps to stay on the course towards your retirement plan. Historically, equity markets have recovered from periods of volatility to make new highs in the long term. Patience and the right approach are the keys in this type of market condition. Here are some important steps you can take to protect your retirement plan amid a volatile equity market.

Gradually Switch From Equities To Debt When Retirement Gets Closer

As you get older and approach retirement, you should gradually shift from equity and other high-risk investments to lower-risk assets such as debt funds, fixed deposits, and so on. It can help in situations where the equity market remains highly volatile for a long period. It can help preserve your accumulated corpus and enable you to retire comfortably.

Actively Rebalance Your Portfolio At Regular Intervals

If you are at the starting or middle stage of your career, you should focus on actively rebalancing your portfolio in sync with your investment plan. If your portfolio has become excessively skewed towards the debt asset class, you may switch some funds from debt to equity assets or make fresh investments in equities so that the allocation between debt and equity stays in line with the ratio prescribed in your investment plan.

If In Panic, Consult Your Investment Advisor

If you are not able to manage your portfolio amid volatility in the stock market, you may consult a Securities and Exchange Board of India-registered investment advisor (Sebi-RIA) and seek guidance to plan the right course of action according to your financial situation. Depending on your financial goals, risk appetite, and income, an investment advisor can help you shape your portfolio.

Investments in equities are usually meant for achieving long-term goals. Therefore, instead of panicking due to volatility in the equity market, you should review your plan carefully so that when the market recovers, you can benefit from it. It is also important to avoid falling into the trap of fake advisors and tip sellers while in panic. Sticking to your original investment plan often proves to be the best option when there is market uncertainty.

The author is an independent financial journalist

Note: This article is intended solely for educational and informational purposes. It should not be construed as investment, financial, legal, or tax advice. Readers are advised to consult an appropriate professional before acting on the information provided.