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Investors are worried about the erosion of their hard-earned money with every fall in the Sensex.

Forget the returns, they are not even able to protect their capital. This reminds us of some basic thumb rules one has to follow when it comes to saving for a comfortable retired life.

If the investor is young then there is no reason to worry.Even if young investor has 100% exposure to equity, and his portfolio has downsized by 40%, he holds a good chance to recover his money as he will witness more market cycles.

But if you are in your late 30s or 40s, the strategy has to change, depending on your needs and existing equity exposure. But the basic thumb rule is if you are holding underperforming stocks, it is better you shift the same money to quality stocks which will bounce back faster when the Sensex recovers. Even if you have to book losses, this change of stocks will help you in the long run.

This is a phase in the investment cycle where you should give more importance to capital preservation than its growth.

If you have already parked your money, then it’s better to stay invested in the market as you may book severe losses at such low levels. But if you want to park some fresh money, it’s better to stay off the equity market for now; especially for retirement savings.

Another investment which is a big NO is the real estate. This sector looks very volatile in the short term, which is risky for building long-term retirement corpus.

In the current scenario, you can look at a combination of fixed deposits, liquid-plus funds and gilt funds. Buying gilt funds is a good option in a softening interest rate scenario.