Is Debt Fund Better To Invest Now?

Layoffs are happening in almost all the companies now. TCS has laid off 12K employees officially but unofficially they might have la8d off more than 30K. And then every other company is doing layoff as part of cost cutting. Some are genuinely doing as their profits decreased whereas some are doing because they have over hired in 2021-2022 time frame. But whatever is the case layoff is happening. And might be it can happen to you too.

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Problem is if the market would have been better, layoff is not a problem. But the job market is equally bad, every major companies have reduced or freeze the hiring. And whoever is hiring, the competition is fierce. And that's why people are more scared now. Now coming to the Finances, is now the best time to invest in debt fund.

Problem is we invest in equity thinking long term in view, but what if you will not have the job tomorrow. Is investing in debt better option now. We tend to keep 3 months of salary as a emergency fund but I feel now having 9 to 12 months is better because it might take some time to get the job again and thus having that buffer is required. And that's why converting all the SIPs from equity to debt might be better option. If you would have a job after 1 year then it's good, you can start moving that debt fund to equity otherwise you can use it if required.

Whetever is the case having cash money is good and best way to keep is in FD or debt fund keeping external factor. And if you have a loan running, you can also use the debt fund to start closing that loan after 1 year. And that's why I have increased my debt fund from 30% to 40%.

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