Volatility

We have already talked about volatility earlier. But that was for the share market. As more the volatility more the wealth creation & accumulation.

But in the current situation volatility has changed its nature, it is now affecting the whole spectrum of financial products and normal life.

Whatever where we thought is stable is not stable now. Things are & will change drastically.

If we take care of equity its nature is volatile. But the debt was considered stable in comparison to equity.
 But pandemic proved that all companies have cash reserves of  2-3 months means they will find it difficult to sustain more than- that without cash flow.

Here balance sheet is not conservative but largely leveraged [over / stretched].
Redemption in debt Mutual Fund showed this issue.
Downgrades & other restrictions are the final results.

Now, some issue is coming with NCD or debenture. Here again, a downgrade or delayed payment is seen in the recent past and will be seen in the future.

Now ULIP plans of an insurance company are also facing some issues, they are demanding returns to be benchmarked against SBI saving bank account return for discontinued policy.
Being opaque in nature of ULIP it is hard to understand the logic behind this.

If means all instruments like ULIP, MF, FD, Bonds, SB, PPF all are showing concern in the short to long run. Business loss, insolvency & downgrades are going to be here.

 We have to leave with this only. The solution lies with ourselves, recheck plans and goals. Attach goals with suitable products available.

Cash is not a king but maintaining the flow of liquidity along with continuity of goals and its services.

Revisit goals
Revisit product.
Diversify