The COVID-19 pandemic has left investors majorly worried across the globe. Many of the investment products are currently giving negative returns while a recession looks inevitable.

It is still unclear how long the pandemic will last and how adversely it is going to impact our wealth in the future. That being said, when the situation is not looking favorable, what should be your strategy to manage your wealth to not just secure capital protection but also fetch desired returns? Here are a few tips in this regard which you are likely to find useful.

1. Reassess your risk tolerance
   The COVID-19 pandemic has significantly eroded the investment portfolio of countless investors. Many of their income has also been hit, so wealth-creation is a difficult feat to accomplish in the prevailing situation. Equally importantly, investors’ risk tolerance, i.e. their actual ability to take investment risk as opposed to risk appetite which is their willingness to take investment risk, could not be the same as before.
   It’s time to reassess your risk tolerance and avoid making a decision believing that you still are capable of taking a high risk as it was before the coronavirus pandemic. An accurate reassessment of your risk tolerance can help you to restart the creation of wealth gradually while protecting your money at the same time.

    

2. Prioritise your financial goals
   Why do you want to create wealth? The answer could be to ensure you maintain and improve the quality of your living, meet your financial goals in time, and lead a comfortable post-retirement life. As of now, most of the investments are down and the income streams are getting choked. Now, these can impact your chances of achieving all your financial goals on time. So, don’t hesitate to plan your financial goals again. It’ll help you to figure out which financial goals are still relevant to you and which are not. You may want to forgo some of your low-priority financial goals to ensure you achieve the important ones. Redrawing your financial goals will help you to use your wealth in the right direction.

    

3. Rebalance your investment portfolio
   The investment scenario is not the same as it was before the pandemic had started. Depending on your age, risk appetite, goals, and return expectations, you would have invested money in different asset classes. However, due to the economic slowdown and the turmoil in the investment markets, your portfolio might have seen an imbalance.
   Do a portfolio-rebalancing to harmonize it with your current risk appetite, goals, and returns capacity of the various asset classes. You may want to consult with your investment advisor if you need any help regarding this.

    

4. Focus on having multiple sources of income
   Having multiple sources of income has perhaps become more significant in the current situation than ever before. Many have either lost their jobs, are on the verge of losing, or have seen pay-cuts owing to the COVID-19 crisis. Focus on creating new income channels is the key. Having multiple income streams would provide some liquidity and lower your dependence on your contingency fund or prevent the liquidation of essential investments when your primary income source is under turmoil. More importantly, it would help you avoid falling into a debt trap.