Your Money: Do You Have a Cashflow for Next 12-18 Months?

The current economic situation, not only in India but across the world, does not augur well for the business enterprises. The overall economy and market scenario, which was already struggling since the beginning of the year due to multiple reasons, has taken a significant hit after the spread of the deadly corona virus.The lockdown which has been implemented in almost every country around the globe since the beginning of the current quarter has forced most of the small as well as large-scale businesses to remain shut. Amidst such a crisis situation, the most potent challenge for the business owners is to maintain a cashflow for say next 12 to 18 months.

A question that is lingering in the minds of most of us is what lies ahead of this difficult situation? Will the market correct on from here? Though answering this question is the trickiest thing to do in today’s scenario, the data and studies doesn’t paint an encouraging picture. With travel and consumption industry taking the backseat, next few months doesn’t augur well for the market.The total scenario can have an even adverse impact on the stock market. Additionally, with the Government announcing huge COVID-relief packages, the upcoming time seems tough for the market.

Predicting market can be one of the toughest jobs to do in today’s scenario. However, as an investor, you should consider revisiting and reshuffling of your investment portfolio. You should invest in stocks which you think can gain value in the upcoming times. Also, consider your current financial state too before entering the troubled waters.If you’ve planned well for this emergency and think that you can manage your cashflow for at least a year from now on, considering that your business will take time to rise again and you may incur losses for most of this period, you’re well placed to go ahead. However, if you’re not sure about this, it’s prudent to play safe. Wait to resume your operations until the normalcy returns.

The BSE Sensex saw its steepest fall since October 2008 in March this year. The mid-cap and small-cap stocks saw a further decline in their values with some of them falling by 40 to 50% of their portfolio value. It’s obvious that there is fear among the investors. However, our take on it is that you cannot be an ostrich in your approach.Though it’s easier said than done, but you should approach the market fearlessly during this time. If you can maintain your cashflow, you can easily create wealth. Do not let yourself getting effected due to the market volatility. Try to be as safe as possible but also do not refrain from taking risks where it’s necessary.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.