The quarterly GDP growth has been published and is at 5%; it has also indicated slowdown in manufacturing and industrial activities. There are apprehensions that the economy will face difficult times ahead. The Finance Minister and RBI have come out with measures to counter this slow down. Economic changes are cyclical and so also equity market. It moves upward over a long term. Now the opinion is divided between optimism and pessimism. But at individual level we can focus on what is in our control and accordingly make/revisit our plans. We suggest some actionable;

1. Be clear on what will make you happy and peaceful;

At individual level one should identify one’s dreams and aspirations in life and strive to achieve them.

2. Define your financial goals;

It may be your Children’s higher education & Marriage, Buying a house, Early retirement, Vacation Planning etc

3. Assess your risk tolerance;

Your life stage can provide clue to this. It is generally believed your equity exposure should be 100 minus your age.

4. Build an emergency fund for 6/12 months of expenses;

Emergency fund helps you meet contingency arising out of job loss, serious ailment to near and dear ones etc

5. Take adequate insurance;

One must protect the family first and plan to meet any risk that the family may face in future. The minimum protection is taking adequate online term insurance to provide a corpus that generate an assured income to the family to maintain the same standard of living as they are getting now. Health insurance is necessary to meet any expenses arising out of hospitalisation of self and family members.

6. Decide on your asset allocation and review them:

Physical assets i.e. Real estate and Gold no more generate high return. One must diversify amongst asset classes and review the proportion of investment between Real estate, Gold, Equity and Debt.

7. Focus on real rate of return i.e. return higher than inflation

Now the rate of interest on Bank Deposits are coming down after the cut in repo rates by RBI.It may go down further. One should aim to get higher interest/return over inflation, so that created wealth does not erode in value.

8. Spend after saving

Stick to “Spend after saving” and not “Save after spending”

9. Do not stop SIP for long term goals

SIP is a rupee cost averaging strategy in portfolio management. You get higher units when market is low. One will benefit when the market goes up in future.

10. In case expenses are higher than income; Make lifestyle changes;

The expenses are three types; Fixed: EMI, Insurance premium, School fee etc Variable: Electricity bill, Grocery, Vegetables, Medicines etc Discretionary: Restaurant, Movies, Gym, Gifts You can try to control discretionary expenses in case your expenses are higher than income  

11. We are facing disruptions in business models; Learn new skills

Disruptions are normal and examples are plenty; Electric vehicles, Amazon, Jio. The emerging technologies such as Artificial Intelligence, Robotics, Nano technology etc demand new skills for being employable.

12. Keep fit;

Healthy food, enough water, proper sleep and exercise & meditation are minimum essentials for a healthy body and mind.

13. Develop positive thinking;

Attending SATSANGs and keeping good company with creative and positive minded people helps in avoiding tensions.

14. Give back to society;

As Swami Vivekananda has said we should give back to society. The least one can do is to plant a tree.