Asset allocation ... # covidtimes

"We will remember these times when things become alright again."

A quote said by many. A feeling felt by most. A hope of things becoming alright again by all.

Trepidation is still in our hearts as we move from lockdown to partial opening up of the Indian economy. The economic impact of the lockdown is going to be immense.

Today we got a call from our maid who didnt have enough money to buy ration or gas for her home.  She had not done any work in April and neither her husband. Someone who had sent her children to decent school.. even to ask for money would have been a big blow to their ego... of no longer improving their personal status.  It was simple enough to do a quick transfer to her account. No questions asked. IMPS ensured she called back immediately to confirm money received. 

I was reading a blog of someone who has been a successful retiree in the FIRE program. Retired in his 30s with over 3 Mn usd in savings. Plans all in place. This market crash has impacted his net worth by over 600k usd. With additional expenses coming because of a second child on its way.. he now needs to rethink the point of being retired. Hey i would have thought even 2.4mn was huge !

The point i am making is that things are quite unpredictable and this covid impact will need us to rethink our financial plans and statuses.  

Think of the students who were to get into the job marketplace in march and june.  What is their future? Tough. And they may have educational loans to pay off. .

With all of these changes one needs to sit down and re evaluate our risk appetites... i know i feel that mine has definately become more conservative that what i used to be a few yrs ago. We need to rethink our asset allocation.

Equities has gone back to where it was 8 yrs ago... we have lost 8 yrs of gain... and to recover it will take us that much more time. ( buffet is sitting on 130Bn USD of cash and he hasnt bought any thing in this downturn).

Gold has had a stellar run... and most dont have much in their portfolio. 

Its best to relook at the folio and rebalance... debt and equity . In equity rebalance small mid and bluechips.

Its time to sharpen our pencils.

Moving my blog to www.simplefinancialsense.wordpress.com