Keep liquid funds handy to invest if and when market falls

The stock market is expected to remain volatile in the coming months as the world grapples with uncertainty around recession, geopolitical tensions and covid resurgence. Any sharp sell off will be an opportunity for agile investors to buy at attractive prices. But the window may open for a short period only. Once any negativies are known and priced in, the market may quickly shift to risk on mode. The 2020 sell off and ensuing rebound are good examples of how quickly the tide can turn. 

Here is what you can do :- identify pockets of surplus now that you can deploy when the time comes. Even a part of your existing portfolio can be liquidated to give you the necessary ammo when required. If falling short on liquidity, some of your debt funds or fixed income assets can provide the cash flow. But don't stray too far from your desired asset allocation. 

Once you identify the surplus, earmark portion of it for straggered deployment at evey market fall. For instance, it the market declines 20℅ , move 20℅ of the earmarked amount into equities. At every fall, deploy similar percentage of earmarked funds into equities. This is the only an indicative plan and investors may identify their own thresholds and triggers.