A Special Diwali And Hope For Normalcy

We wish you and your loved ones a very Happy and Prosperous Diwali.

2020 has been a literal roller coaster throwing all what was possible towards mankind, many of which were never seen before. This new year greeted us with a massive internet outage impacting critical digital services. This was dwarfed by the onset of COVID-19 pandemic which open the gates of massive health and economic crisis. We were locked in our homes for months, stock markets crashed, bond markets froze, Gold peaked at 5K / gram. Do you remember the Oil prices becoming even negative ? India’s interest rates have been reduced to a record low. Banks were forced to invoke a never used before used ‘Moratorium’ for all loans. And then came in cyclones + locusts. Millions lost their jobs or suffered pay cuts. Schools have been shut since March 2020 and are now running on never fathomed ‘Video Conferencing’ based teaching for kids of all age.

On a positive side, it was a treat to the eyes and mind to see zero traffic, clean air and flora / fauna coming back to life with no human intervention. Never before people spent so much time with their families, enjoying home cooked food and learning new skills. Using digital technologies, people connected across the world using video conferencing solutions like Zoom, Google Meet, etc. I personally played more board games during the lockdown than what I played in my childhood.

But 2020 paid a massive cost for this positivity. A crisis of this sort makes one wonder if any planning can help in tackling with such events. While all this was happening (and we are still not out of the woods), the stock markets are in their own word. Sensex dropped from a high of 41K levels in February to a low of ~26K in a month and then zoomed back to 43K in November.  I got in one of the Diwali messages this amazing Diwali image of a ‘diya’ chart being made out of Sensex’s 2020 movements (See right). If one would have woken from a deep sleep, his / her investment valuations may perhaps show no change.

You may want to read two of our blog post released during the helm of the crisis in March and April

Managing Finances in Uncertain Times – posted on 2 April 2020

COVID-19 – Impact on Your Personal Finance  – posted on 31 Mar 2020

While I was writing these posts, I had access to same set of information as each one of you and I can assure you that I have zero forecasting skills. I wrote what I believed should be the actions taken by an investor in times of crisis. Bargains don’t come when the news flow is all good. At times no action is the best action. Understanding of one’s life goals is key and choosing a right savings solution to match with the tenure of that goal helps to keep finances on track. And if one has time at hand, crisis like these end up becoming a god send opportunity to add to the existing kitty of investments so that a windfall gain can be made when normalcy restores. Many of you may reconcile this fact that investments done in March & April are 30%+ as of November 2020.

On this Diwali, I sincerely pray that by the time we see the next Diwali, a medical solution is identified for this crisis. I wish that all businesses and employments reach their normalcy. Hopefully one would be able to plan and enjoy their life even better. Let us use the positive side of 2020 and try fitting them as a part of our lives. We did get a great wakeup call that we need to take care of our 3Fs – i.e. Fitness, Family and Finances. For the last F, i.e. Finance, we at Banyan Financial Associates are there to be of any help and support.

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