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I lost my job because of Covid and my portfolio is down 23 per cent. What should I do now?

Assess your asset allocation to see if your investments can help you withdraw the income required, advises Dhirendra Kumar

At the age of 53, I have lost my job because of the current situation. My portfolio has 75 per cent invested in equity, along with some hybrid funds. Within hybrid funds, mid and small caps have been impacted heavily and my portfolio is down 23 per cent. What is the way out?
- Anonymous

You need to act fast. Set up your portfolio on Value Research Online and look at your asset allocation. Also, figure out how much income you need to derive from your investments for your daily needs and if you are not able to derive that income from your investments, then you need to look for a job to support your daily expenses. You may even need to redeem your investment or sell a part of your investment to support yourself and your family. Keep about 50-55 per cent of your investments in equity and the rest in fixed income. This will help you add stability to your portfolio.

Don't worry about the decline in mid and small caps for now and start drawing your income from the fixed income portfolio. I don't know the scale of your investments and the income you need. So, you need to assess the situation and see whether you have enough investment from which you can maintain a withdrawal rate of 6 per cent. If it isn't, then maybe it is time to look for a job or reduce your income expectation with a change in your lifestyle.

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