The COVID-19 pandemic is hitting the economic landscape very hard. Governments had at one point, implemented lockdown measures for protecting the health of their citizens. But, this is affecting the global economy. We may enter a global economic recession due to this pandemic. Recession is also going to impact the stock markets. Thousands of businesses will shut down due to the reason and millions of people will lose their jobs. Many experts think that this recession is going to be longer when compared to the 2008 recession. 

You can make some wise moves for stabilizing your finances. Most countries have already flattened the curve of the coronavirus pandemic. You should pay all the high-interest debt for reducing some financial pressure. The lockdown period is the best time to rebalance your investment portfolio. In this article, we are going to share some tips that will help you in achieving your financial goals.

1. Maintain your emergency funds:

You should focus on boosting your emergency funds. Make sure that you have reversed some pool of cash. This cash will help you in affording necessities during the economic downturn. The global economy might enter into a recession due to this pandemic. Thus, you should focus on boosting your emergency funds first.

 2. Strict Budgeting Measures:

You need to free up your money for affording necessities during an economic recession. Thus, you should exercise strict budgeting measures during an economic downturn. Many people are already working from their home so they don’t need to worry about transportation costs. You should cut down all the non-essential spending during this economic downturn.

3. Give more priority to health insurance:

You shouldn’t compromise on insurance protection during this pandemic. If you have already taken some long term plan, then you should pay its premium on time. This plan will eventually help you during tough times. Also, make sure that you have medical insurance. This will help you in paying the COVID-19 medical bills.

 4. Don’t discontinue your important investments:

Investments are very important for your portfolio. They will help you in achieving your life goals. However, every life goal has a different value. You should try to manage your important investments. If you want to raise some cash, then you should discontinue your bad investments. You can also pause some of your investments like mutual fund SIPs.

 5. Avoid panic selling:

The global market was crashing very fast in May. However, the market is now stabilizing with time. Many investors are feeling uneasy due to the current pandemic. Your portfolio might tumble due to this pandemic. Thus, you might think that it is a good time to sell all your stocks. This is the worst choice that you can make during this pandemic. If you are selling your equities at a very low price, then you will lose a lot of money. The value of stocks will return to their normal value after this pandemic is over. The global market is already healing with time. If you are selling shares, then you will only increase your losses. You should hold your shares until the pandemic is over. 

Conclusion 

The Coronavirus pandemic has shaken the global economy. Unemployment is rising due to this pandemic. The stock market has fallen due to this pandemic. Thus, investors have already lost a lot of money. Millions of businesses are been closed due to loss of demand. Everyone is worried about their finances. The tips mentioned in this article will help you in stabilizing your financial condition. You can take these small steps for managing your financial condition. This pandemic will eventually end and life will return to normalcy. 

Many investors are still recovering from the 2008 stock market crash. The economy was growing very fast before the coronavirus pandemic. Investors were already looking for methods to protect their investment portfolios. They want to protect their portfolio from the next financial crisis which might come after the coronavirus pandemic. Mutual funds have very limited exposure to the global market. There are various methods to protect your mutual funds from the next financial crisis. In this article, we are going to talk about the key strategies that you can use for protecting your mutual funds.1. Go for Bond Funds 

Bonds are considered to be the safest investment. You will always get some interest payments every year. If you want to protect your mutual funds from the economic turmoil, then you should invest in government-issued bonds. These bonds are safer when compared to corporate bonds. The stock market might crash due to the pandemic. But, the U.S government is never going to declare bankruptcy.

You can also protect your funds from an America crash. Investors should look for bond funds that are issued by stable foreign governments. The U.S economy will also have some effect on other nation’s economies. However, it can’t completely destroy the economy of other first-world counties. 

2. Avoid Leveraged Funds 

The leveraged funds were the main reason behind the 2008 crisis. You can use these funds for generating some quick profits. However, these funds are also riskier when compared to other bonds. If you want to remove unnecessary risk, then you should get rid of leverage funds.

3. Reduce Risk

Money market funds are the most stable type of mutual funds. These funds are short-term debts that are issued by the government. Sometimes large corporations can also issue short-term debts. Thus, the risk of default is very low on these funds. You will get only limited returns on these funds. Money market funds are not going to help you in building serious wealth. However, you don’t need to worry about losing this money.

4. Check foreign bonds

You should also invest in good foreign corporate stocks. There are many good foreign bonds that will help you in earning good returns. This will also help you in limiting your risk. The foreign stocks will actually gain value if the American market crashes. Thus, you can limit your risk by investing in both American government bonds and foreign government bonds.

5. Spread the Risk 

The best thing about mutual funds is that it will increase the degree of diversification. You don’t need to worry about diversifying your funds. However, you should even protect your fund investments by investing in different types of funds. You should invest in both long-term and short-term bonds.

  6. Noncyclical Funds 

Most people think that the stock market is the riskiest investment. You can lose all of your investment during a global recession. However, there are still some stocks that you can invest in during a recession. These stocks are known as noncyclical stocks. They are more stable when compared to other stocks because the companies are providing essential goods and services. The best example of this is the utility sector. People will always need electricity, water, and gas. Also, you can consider tobacco and alcohol as an important commodity as they remain strong during an economic recession. Customers will spend money on these products even if the economy is down.

Conclusion

We might face a financial crisis after this coronavirus pandemic. However, the U.S. economy won’t stay down for a long time. The USA market has always thrived after a recession. You should use the tips mentioned in this article for protecting your mutual funds. Also, the best way to protect our mutual funds is by letting the economic storm pass.