When markets crashed in March 2020, many investors watched years of gains disappear in a matter of weeks.
I wasn’t one of them !!
Looking back, it appears as though I timed the market perfectly. I reduced risk before one of the biggest market crashes in modern history and then rebuilt my portfolio after markets had already fallen significantly. But that’s not what happened.
I had no idea a global pandemic or the market crash was coming, just like anyone else. The real reason I avoided much of the crash was that I had started focusing on financial planning rather than investing randomly and got lucky.
Before COVID, I Had Investments but Not a Plan
For years, I invested the way many people do. Whenever I had spare money, I bought investments that seemed attractive at the time. My portfolio grew over the years, but if someone had asked me what each investment was meant to achieve, I would not have had a clear answer.
I had investments, but I did not have a plan. Like many investors, I spent more time thinking about returns than about the purpose of the money.
Things started changing when I began reading personal finance blogs more seriously. I spent countless hours reading Freefincal by Pattu Sir, Subramoney by P V Subramanyam, Finvin by Melvin Joseph etc that started making more sense. While each author had a different style, the overall message I understood was : investing should be driven by life goals rather than products, returns, or market predictions.
That idea eventually led me to FeeOnlyIndia and the concept of SEBI-registered fee-only financial advisors. For the first time, I realized that financial planning should begin with understanding my goals rather than selecting investments.
Rebuilding My Financial Foundation
I eventually connected with a SEBI-registered investment advisor. To my surprise, our conversations did not begin with mutual funds selections or stock market returns. Instead, we started with the basics.
Did I have adequate term insurance? Was my health insurance sufficient? What financial risks could affect my family? What were my important life goals? When would I need money for those goals?
The process forced me to think differently about money. Before discussing investments, we reviewed my financial foundation. Insurance coverage was reassessed, goals were clearly defined, and a plan was created for each major objective. Only then did we begin discussing investments.
Once my goals were mapped out, something became obvious. Many of my existing investments no longer made sense. Some investments had been accumulated over the years without a specific purpose, while others were taking more risk than necessary for the role they were meant to play.
To align my portfolio with my goals, I had to make significant changes. Many existing investments were sold, and the portfolio was rebuilt around specific goals and timelines. This was not a market call. I wasn’t worried about valuations, and I wasn’t expecting a crash. I was simply implementing a financial plan.
Then COVID Happened
While I was going through this process, the COVID crash arrived. Markets plunged, investors panicked, and financial media was filled with predictions and uncertainty.
At that point, my attention was largely elsewhere. I was focused on implementing the new financial plan, restructuring investments, and allocating money according to my goals. As markets continued to fall, I was able to deploy money into the newly structured portfolio.
Looking back, the timing appears remarkably fortunate. It can easily be interpreted as successful market timing.
Why It Looked Like Market Timing
In hindsight, it appears that I exited investments before the crash and reinvested after markets had already fallen significantly. That sequence would make any investor look smart.
The reality is much simpler. The timing was luck. The planning was intentional.
COVID happened to arrive in the middle of a major restructuring of my financial life. The decisions were driven by goals, insurance needs, and long-term planning rather than market forecasts. The outcome looked like market timing, but the process was financial planning.
The Real Lesson
Most investors spend a lot of time looking outside for answers. The next stock. The next mutual fund. The next market prediction. The next expert opinion.
I did the same for many years.
What ultimately changed my investing life was realizing that the most important questions were not about the market. They were about me.
What are my goals? When will I need the money? How much risk do I actually need to take? How do I protect my family financially?
Once those questions were answered, investment decisions became much easier. The market movements became less important, and my goals became more important.
The biggest change was not in my portfolio. It was in my mindset. I stopped looking outside for the next investment opportunity and started looking inward at what I was actually trying to achieve.
My Plan for the Upcoming Market Crash
Another market crash will happen. I do not know when it will happen, and I do not know what will cause it.
My preparation today is based on the same principles that helped me during COVID indirectly. I continue to align investments with specific goals and timelines. Near-term goals are separated from long-term investments. Insurance coverage is reviewed periodically. Asset allocation is determined by the needs of the goal rather than by market forecasts.
Most importantly, I focus on the things I can control instead of predicting the things I cannot. If the upcoming market crash arrives tomorrow, I do not expect to respond by making predictions. I hope to respond by continuing to follow a plan that was built long before the crash occurred.
That lesson continues to guide my financial decisions today, and it remains my plan for the upcoming market crash.