How to survive the current market downturn?

How to survive the current market downturn?

  The situation in the market is grim. Comparisons with 2008, and even 2000, have begun. Older investors, who have weathered one of those massive downturns, are likely to be better prepared emotionally. Younger investors, on the other hand, who have not witnessed such a brutal downturn before, are likely to find it more difficult to deal with. In this story, we shall discuss a few strategies that can help investors survive this severe market downturn. The health scare: This story is being written on April 6, and there is no relief from the spate of bad news. The number of cases and the death toll—4,314 and 118 respectively—continue to rise inexorably. The situation is grimmer in countries like the US, Spain, and Italy. In India, so far, the number of cases and deaths is smaller, for our population size. But uncertainty looms. We do not know whether the lock down will end in the middle of April or will be extended. The risk of a spurt in the number of cases once the lock down ends also looms. It could well force the authorities to impose another lock down.   Economic slump: On the economic front, GDP growth projections are being continuously revised downward. Fitch Ratings, whose earlier projection said India would grow at 5.1 per cent, has now revised it to a 30-year low of 2 per cent. India is primarily a consumption-driven economy. Private consumption accounts for 60 per cent of GDP. The disruption in economic activity will, in the months that follow, translate into salary cuts and job losses, which will, in turn, affect private consumption...