Facebook TwitterLinkedInYoutubewhatsapp Start Planning for your Financial goals
Schedule Your Free Consultation
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Holistic investment planners, financial planning Chennai, Private wealth management Chennai

Holistic investment planners, financial planning Chennai, Private wealth management Chennai

Financial Planning chennai India, Private wealth management chennai India, Investment Advisory India, Systematic Investment Plan, Mutual Fund SIP, Mutual Fund ELSS, Tax Saving scheme

  • Home
  • About Us
    • Who we are & What we do
    • Services
      • Financial Road Map
      • Retirement Roadmap
      • Asset Allocation Plan
      • Webinar
      • Money Management
      • Wealth Management
    • In the Media
    • Testimonials
    • What Makes Us Different
    • How we can help you
    • Specialties
    • Honors and Awards
    • Vision & Mission
  • Resources
    • Blog
    • Articles
    • Podcast
  • Ideal Client
  • Contact Us
How to make your portfolio recover better and faster from the stock market crash

How To Make Your Portfolio Recover Better & Faster From the Stock Market Crash? (Part 1)

by Holistic 4 Comments | Filed Under: Stock Market

Listen to this article



“There are decades where nothing happens, and there are weeks where decades happen.” – Lenin

That’s how the stock market crash was in March 2023. The Sensex has crashed from a peak of 41952 to 25981.

Steep & quick fall of 38%!

Resulted in panic, negativity and pessimism!

Fear and short-term thinking take over the market during these kinds of times. Perceived Risk goes up.

Table of Content:

  • Questions to Ponder over
  • Will we recover from this stock market crash?
  • Make your Portfolio Recover Better & Faster
  • A Powerful & Proven Strategy: Portfolio Optimisation
  • Is it ok to Redeem & Reinvest now?
  • Do I need to do this revamp NOW – during this crisis?
  • A Bonus Benefit of Doing Portfolio Optimisation NOW
  • Tips to Identify Poor-performing Equity Funds
  • Conclusion

Questions to Ponder over

  • Is this the first time, the stock market has crashed like this?
  • Will this be the last time?
  • Real Risk Vs Perceived Risk. – Which is higher now?
  • Does the market’s overreaction lay a strong foundation for above-average returns in the future?

Also read, Stock Market Crash!!! What’s Your First Priority?

Will we recover from this stock market crash?

[the_ad id=”17788″]
Stock market dislikes uncertainty. Also, the market doesn’t have a clue – when this uncertainty would end? So it is experiencing a huge fall.

Do you think, next year by this time, we will have better pandemic control?

Do you think, next year by this time, all our offices will be open and functioning?

Do you think, next year by this time, we will have a more stable economy?

Volatility always gives way to tranquillity. Chaos gives birth to dancing stars.

This crisis too shall pass. This crisis will eventually remake the business world into wiser, stronger and more creative. The economy will become better than before. What’s coming for the stock market in the long-term will be amazing.

“Although the world is full of suffering, it is also full of the overcoming of it.” –Helen Keller

Instead of focusing on the suffering situation, let us focus on the overcoming of it.

Make your Portfolio Recover Better & Faster

When will the stock market recover? It depends on so many variables and all of them are outside your control.

How fast will your portfolio recover when the market recovers? It depends on only one variable and it is COMPLETELY under your control.

It depends on the performance of your individual portfolio. It depends on what do you own in your portfolio. Do you own below-average performing investments or above-average performing investments?

If you own poor-performing investment, it may not recover or it may recover slower and may take longer time to recover than the better performing investment.

A Powerful & Proven Strategy: Portfolio Optimisation

Portfolio optimization is a strategy by which you redeem your below-average investments and reinvest the redemption proceeds in above-average investments.

Cut the weeds and water the flowers. This looks like a simple strategy but it is very sound and profound.

Is it ok to Redeem & Reinvest now?

When the stock market is down, is it ok to redeem now? Are we not booking a loss? Is it required?

This strategy is not suggesting you come out of your equity investments. It is just making you come out of poor-performing equity investments and reinvest it in better-performing equity investments. This strategy helps you recover faster when the market recovers.

Also watch the video here!

Do I need to do this revamp NOW – during this crisis?

The stock market is volatile because of the prevailing abnormal situation. When normality sets in, there is a high likelihood of market recovery. When the market recovers, if you want your portfolio also to recover then you need to come out of your poor-performing investments NOW. It is better to do this when still the abnormality prevails.

Is there a proof for this? How is this strategy faired during earlier Crises?

The stock market has faced two major crashes. One is in 2000 and the other is in 2008 which were much worse than the 2023 crash. The market crashed by 53% in 2000 and by 61% in 2008.

Let us check how an investor could have benefitted if he implemented this portfolio optimization during those crises.

Assume an investor has invested in 3 equity funds Rs 1 Lac each in the year 2000 before the market crash. Let us see what would have been the impact because of the market crash.
market crash Without doing, portfolio optimization, if the investor decided to continue to stay invested in these below-average performing schemes, then let us see how the recovery would be in 2003.

Read, If Portfolio Optimization Promises Outstanding Returns, Wouldn’t You Take It
portfolio optimization Yes. There seems to be some recovery. Is this recovery sufficient? Is this a slow recovery? If the investor could have done portfolio optimization with the help of a professional financial planner and moved out of poor-performing schemes and reinvested the money in better performing schemes, his portfolio could have recovered better and faster.

That is in the above case if he could have redeemed Rs. 157870 from those poor-performers on 21.9.2001 and reinvested the same in better-performers, let us see, how the recovery could have been.
reinvested has recovered Recovery is significantly more in the above case because of portfolio optimization.

Let us do one more experiment like the above for the 2008 crisis.

Imagine an investor has invested in 3 equity funds Rs 1 Lac each in the year 2008 before the market crash. Let us see what would have been the impact because of the market crash.

impact because of the market crash Without doing, portfolio optimization, if the investor decided to continue to stay invested in these below-average performing schemes, then let us see how the recovery will be in 2010.
some recovery it is very slowThough there is some recovery, it is very slow. Let us see, how the recovery gets faster when the portfolio optimization strategy is used by withdrawing from the above poor performers and reinvesting in the below better performers.
is much better because of portfolio optimization The recovery is much better because of portfolio optimization.

So, redeeming your non-performing equity investments and reinvesting the same in a better performing equity investment will deliver remarkable results for you.

Optimize Beyond Equity Mutual Funds:

The majority of investment portfolios are not limited to having equity mutual fund investments alone.

Investment insurance plans lock up a good portion of corpus only to give very poor returns even in long-term. It includes both the endowment insurance plans and the ULIPs.

Get Rid of your Endowment Plans:

It is not a surprise, endowment plans earn poor returns.

If an investment is giving returns around just 4%-5%, an investor must not have such products in their portfolio.

Surrender your endowment insurance plans at the first opportunity you get to enable your faster portfolio recovery.

Poor returns aside, with endowment insurances in the context, they give a false idea that ULIP are better investments—which they are not.

Get Rid of Your ULIPs, Too:

ULIPs are the investments that perform poorer than poor performing equity mutual funds, even in their best days.

I.e. 6%-8% return at their best. But the tricky part is, since ULIPs invest in equities too, this stock market crash has affected their returns too.

Post crash, the returns from ULIP investments will be lesser than the usual 6%-8%. It is a trademark poor investment that should be removed from a portfolio.

Read: Unpleasant Facts About Investing in Insurance Plans

Now that you are optimizing your portfolio for faster recovery from the stock market crash, it is more than a good reason to get back these insurance investments.

Surrender all your endowment insurance plans and ULIPs at the first opportunity you get to do justice to your investments.

This strategy to work effectively, you need to act fast and do the portfolio optimization before the market recovers.

A Bonus Benefit of Doing Portfolio Optimisation NOW

Apart from faster and better recovery, there is one more advantage of doing portfolio optimization now – during the crisis. You will have a lesser tax liability if you do the portfolio revamp now compared to doing it after recovery.

Because of the market crash, as the portfolio value has come down, if you do the revamp now the profit booked will be less. So there will be a lesser tax liability. If you do the revamp after the market recovery, then the tax liability will be more.

Let me explain this with an example.

If someone has invested Rs. 10 lacs in 2017 and the portfolio value reached Rs 15 Lacs on Jan 2023 and the value has come down to Rs.12 lacs in March 2023 because of the market crash.

If they revamp their portfolio now (2023), the taxable gain is only 2 lacs. There is a possibility that it may recover in 2-3 years to 15 lacs.

Instead of revamping their portfolio now, and they wait for the market to recover to do the revamp. As it is a poor performing scheme it will perform lesser than the revamped portfolio and reach 15 lacs after 3-4 years. If you do the revamp after the recovery / after 3-4 years, then the taxable gain is 5 lacs.

The tax liability is lower if you do the portfolio revamp now.

Also read, COVID-19 Vs. INSURANCE CLAIM: Is Your Insurance Policy Immune to Corona Virus?

Tips to Identify Poor-performing Equity Funds

1. Check if the fund is outperforming the respective benchmark index or not.
2. Check if the fund is outperforming most of the peer-group funds.
3. Check with your financial advisor for other non-quantitative analytical parameters like,

  • The ability of the Mutual Fund company to retain the fund managers
  • How evolved is the investment process of the mutual fund company?
  • How consistently the mutual fund company follows the chosen investment philosophy?

Conclusion

Dark nights always give way to bright mornings. The biggest opportunity arises out of the worst disasters. Portfolio optimization is a very good opportunity for you to recover better and faster from this stock market crash.

Continue to Part 2:
How To Make Your Portfolio Recover Better & Faster From The Stock Market Crash? (Part 2)

Continue to Part 3:
How To Make Your Portfolio Recover Better & Faster From The Stock Market Crash? (Part 3)

[the_ad id=’13360′]

Reader Interactions

Previous article: Attention Investors! Want To Take Unfair Advantage of the CoronaVirus Crash? You Are Just One Step Away
Next article: How to take advantage of this lockdown to take your financial life to the next level?

Comments

  1. Monika Gupta says

    May 16, 2020 at 2:06 pm

    Informative article.

    Reply
    • Holistic says

      July 14, 2021 at 2:17 pm

      Thank you

      Reply
  2. Kasi Subramaniam says

    April 7, 2020 at 2:21 pm

    Useful article from Holistic as always . The numbers and the data add up giving much confidence to readers who are looking to optimize MF allocations in these uncertain times.

    Reply
    • Holistic says

      April 7, 2020 at 4:11 pm

      Thanks Kasi. We are happy that you found it useful 🙂

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Client Login

Recent Posts

  • Tata AIA Life Insurance Wealth Pro Plan Review: Good or Bad?
  • Bajaj Allianz Life Smart Wealth Goal – Wealth Variant Plan Review: Good or Bad?
  • Max Life Savings Advantage Plan Review: Is It a Good Investment Choice?
  • Tata AIA Life Insurance Fortune Guarantee Pension Plan Review: Good or Bad?
  • HDFC Life Smart Woman Plan Review (2023): Is It Worth Investing?
Jey S
Jey S
24. September, 2021.
I have been using Holistic Investment Planners for the last three years. Mr. Srinivasavaradhan answered all my questions and doubts very patiently during the first free consultation. I was able to clearly define my short-, medium- and long-term goals once I signed up for the comprehensive plan and got their investment plan suggestion to achieve my goals. They are very polite and highly professional whenever I contact them for any queries or make investments. They never pressurize you to invest on their recommended financial products. I would have been lost money by investing directly without their help since I do not have time and knowledge about different financial products. Risk planning is also done as part of financial planning. Truly, they are holistic planners when it comes to your financial planning. They help you to define your life goals, understand your financial resources and establish a plan to invest towards reaching those goals. They do review your plan as you progress to make sure that you are on correct path to achieve those goals. Kudos to the team and keep up the good work!!! I am happy that I found holistic investment planners for my financial planning and management.
aksaswadkar
aksaswadkar
24. September, 2021.
I was about to retire and really not understanding how to invest money to have financial freedom and fulfilling my goals. Was desperately searching on internet way out and fortunately came across Holistic Investment Planners. I read number of articles on their website and realized that this is the agency which I want and engaged their services for my retirement planning. It is an excellent experience to be associated with Holistic. Right from day one our interaction was fantastic and they gave me such a wonderful plan that I had never imagined. I am fortunate enough to be in the client list of Holistic. I have recommended Holistic to my friends as well.
Lionel Faber
Lionel Faber
16. September, 2021.
I've been availing their services for the past year. They are highly knowledgeable in the field and are very patient with all doubts and queries. Personalized financial planning is provided keeping your short term, medium term and long term goals in mind. They do not pressurize you to purchase schemes of their choice. They provide their input and suggestions and leave the decision up to you which shows their honesty and high principle.
Sridhar
Sridhar
8. September, 2021.
Financial planning brings peace in life. Holistic Investment have supported in arriving financial plan based on future goals. My investments are regular since then. They are professionals in their business, will recommend others.
Nitesh Agrawal
Nitesh Agrawal
6. September, 2021.
I have been using Holistic Investment Planners from last one year. The journey has been fantastic. Being a finance person myself I always thought we can look after and plan own finances also. However, due to lack of time and deciplain the things are not always as desired. After joining with Holistic Investment for the first time Icame to know the Financial goals and quantified them. Some dreams were unrealistic based on the earnings and savings so had a reality check. Also got the information and deciplain of investing on regular and more rewarding securities. I definetly suggest to use Holistic Investment Planners. They are professionals, available and hear youor full story before presenting plans. They are flexile in the sense if there are some urgent deviations required, they help to plan the same. For all professionals/individuals I would suggest using professional help of Holistic Investment Planners for best results in long term investment and financial goals achivements. Last advise will be to start early in your life. It really pays well to start in the beginning itself else the dreams needs to adjust :)
Swetha Vasanth
Swetha Vasanth
6. September, 2021.
This is my first year service with the Holistic Team and I would say that they are very much helpful in creating a financial plan and follow ups during the year. I would definitely suggest them if anyone who is willing to proceed with their savings professionally.
Joseph Mathias
Joseph Mathias
6. September, 2021.
I came to know about Holistic Investment Planners online while searching for different investment ideas. Once I contacted them the journey was very smooth. Mr. Ramalingam explained all the aspects of Financial planning in detail and it opened my mind. I realized how important it is to have a Financial planning. Mr. Rajan suggested all the requirements as per my goals and made a Investment plan keeping in mind of my goals. I started my Investment journey with them. I wish I had done it some years back then it would have been in a different level. Review meetings were held every six month to check the implementation of the plan and check the results as per the requirements and to check if any changes required. Overall it was a good experience with Holistic Investment team and would like to continue in the years to come.
Srinvas Kannan
Srinvas Kannan
30. July, 2021.
I came across Holistic investment planners almost 5-6 years back, but I did not have the trust since I had met a few of them who did not sound promising. Then I started investing through a financial advisor of my friend. After 4 years of investing the returns were very low. I was disappointed and started looking for financial advisors when I came across Holistic investment. I had a detailed discussion about my goals and the way they would approach achieving my goal before deciding to switch my investments to them. After a thorough analysis of my then existing portfolios, they suggested new ones and we zeroed-in on 6 schemes/funds where our investment would be split. I am glad I made the decision of switching over and taking Holistic planner's advise, my returns are handsome and I only wish I could have taken their help/advise 5 years back itself. Neverthless, I would like to recommend their services for investment and financial advise if someone is serious about their investments.
Shivaram Andiappan Selvaraj
Shivaram Andiappan Selvaraj
3. July, 2021.
I got a free first time consultation. I got my doubts resolved. They also gave additional advises for investment planning which was also useful.
Nellai B
Nellai B
26. June, 2021.
I have been associated with them for the past three years. They are very professional and polite in answering all our questions. I have complete trust in their suggestions. I strongly recommend for anyone. I am looking forward to have strong and successful association with them.
Google rating score: 4.4 of 5,
based on 61 reviews

Google Reviews

Jey S
Jey S
24. September, 2021.
I have been using Holistic Investment Planners for the last three years. Mr. Srinivasavaradhan answered all my questions and doubts very patiently during the first free consultation. I was able to clearly define my short-, medium- and long-term goals once I signed up for the comprehensive plan and got their investment plan suggestion to achieve my goals. They are very polite and highly professional whenever I contact them for any queries or make investments. They never pressurize you to invest on their recommended financial products. I would have been lost money by investing directly without their help since I do not have time and knowledge about different financial products. Risk planning is also done as part of financial planning. Truly, they are holistic planners when it comes to your financial planning. They help you to define your life goals, understand your financial resources and establish a plan to invest towards reaching those goals. They do review your plan as you progress to make sure that you are on correct path to achieve those goals. Kudos to the team and keep up the good work!!! I am happy that I found holistic investment planners for my financial planning and management.
aksaswadkar
aksaswadkar
24. September, 2021.
I was about to retire and really not understanding how to invest money to have financial freedom and fulfilling my goals. Was desperately searching on internet way out and fortunately came across Holistic Investment Planners. I read number of articles on their website and realized that this is the agency which I want and engaged their services for my retirement planning. It is an excellent experience to be associated with Holistic. Right from day one our interaction was fantastic and they gave me such a wonderful plan that I had never imagined. I am fortunate enough to be in the client list of Holistic. I have recommended Holistic to my friends as well.
Lionel Faber
Lionel Faber
16. September, 2021.
I've been availing their services for the past year. They are highly knowledgeable in the field and are very patient with all doubts and queries. Personalized financial planning is provided keeping your short term, medium term and long term goals in mind. They do not pressurize you to purchase schemes of their choice. They provide their input and suggestions and leave the decision up to you which shows their honesty and high principle.
Sridhar
Sridhar
8. September, 2021.
Financial planning brings peace in life. Holistic Investment have supported in arriving financial plan based on future goals. My investments are regular since then. They are professionals in their business, will recommend others.
Nitesh Agrawal
Nitesh Agrawal
6. September, 2021.
I have been using Holistic Investment Planners from last one year. The journey has been fantastic. Being a finance person myself I always thought we can look after and plan own finances also. However, due to lack of time and deciplain the things are not always as desired. After joining with Holistic Investment for the first time Icame to know the Financial goals and quantified them. Some dreams were unrealistic based on the earnings and savings so had a reality check. Also got the information and deciplain of investing on regular and more rewarding securities. I definetly suggest to use Holistic Investment Planners. They are professionals, available and hear youor full story before presenting plans. They are flexile in the sense if there are some urgent deviations required, they help to plan the same. For all professionals/individuals I would suggest using professional help of Holistic Investment Planners for best results in long term investment and financial goals achivements. Last advise will be to start early in your life. It really pays well to start in the beginning itself else the dreams needs to adjust :)
Swetha Vasanth
Swetha Vasanth
6. September, 2021.
This is my first year service with the Holistic Team and I would say that they are very much helpful in creating a financial plan and follow ups during the year. I would definitely suggest them if anyone who is willing to proceed with their savings professionally.
Joseph Mathias
Joseph Mathias
6. September, 2021.
I came to know about Holistic Investment Planners online while searching for different investment ideas. Once I contacted them the journey was very smooth. Mr. Ramalingam explained all the aspects of Financial planning in detail and it opened my mind. I realized how important it is to have a Financial planning. Mr. Rajan suggested all the requirements as per my goals and made a Investment plan keeping in mind of my goals. I started my Investment journey with them. I wish I had done it some years back then it would have been in a different level. Review meetings were held every six month to check the implementation of the plan and check the results as per the requirements and to check if any changes required. Overall it was a good experience with Holistic Investment team and would like to continue in the years to come.
Srinvas Kannan
Srinvas Kannan
30. July, 2021.
I came across Holistic investment planners almost 5-6 years back, but I did not have the trust since I had met a few of them who did not sound promising. Then I started investing through a financial advisor of my friend. After 4 years of investing the returns were very low. I was disappointed and started looking for financial advisors when I came across Holistic investment. I had a detailed discussion about my goals and the way they would approach achieving my goal before deciding to switch my investments to them. After a thorough analysis of my then existing portfolios, they suggested new ones and we zeroed-in on 6 schemes/funds where our investment would be split. I am glad I made the decision of switching over and taking Holistic planner's advise, my returns are handsome and I only wish I could have taken their help/advise 5 years back itself. Neverthless, I would like to recommend their services for investment and financial advise if someone is serious about their investments.
Shivaram Andiappan Selvaraj
Shivaram Andiappan Selvaraj
3. July, 2021.
I got a free first time consultation. I got my doubts resolved. They also gave additional advises for investment planning which was also useful.
Nellai B
Nellai B
26. June, 2021.
I have been associated with them for the past three years. They are very professional and polite in answering all our questions. I have complete trust in their suggestions. I strongly recommend for anyone. I am looking forward to have strong and successful association with them.
Google rating score: 4.4 of 5,
based on 61 reviews

Footer

  • Articles
  • Gallery
  • Ideal Client
  • Jobs(Full Time)
  • Podcast
  • Services
  • Testimonials

Connect With Us

Holisticinvestment.in
10/15, Second Cross Street,
Seethammal Extn.,
Teynampet,
Chennai – 600 018,
INDIA.

Copyright © 2022. Holisticinvestment.in | All rights reserved.    Cared with ❤ by T-Square Cloud

×