Hello Readers!
With the fall in the market in the last some months, many investors redeemed their Equity mutual funds in panic, while many were there who exposed their investment more in Equity funds. all these scenarios have led to the rise of many questions regarding the fall in the net inflows to equity mutual funds in the month of June.
Many are in dilemma, which decision was taken with the investment in Equity mutual funds was right, or both these are wise choices for investors to make.
Well as per the financial experts, the decision taken by a smart investor in a downtrend would be based on his three attributes discussed below. Read to know how a smart investor would have managed their investment in hard times.
Avoid Timing in Equity Mutual Funds
Investing in Equity Mutual Funds, for the long term can help you create wealth for your big goals; however, you need to be aware of the short-term volatility that is likely to happen while investing in equity mutual funds.
The volatility in the market is unpredictable but expected, whether more or less. It is suggested do not invest in Equity Mutual funds, stomach this kind of volatility. This short term volatility cast very little effects on long term investments if investment carried for long-term.
Also timing the market and then picking out the right time to invest is a full-time job. It’s better to avoid it and go investing through SIP, in mutual funds, this makes timing the market work, much easy.
Diversifying Equity Fund Portfolio
Diversification, in the portfolio, helps the investor in two ways, reduces the risk, and make sure that their money is spread adequately across more than one funds of different types so that, when one is lagging, the other is doing well and in bad times.
Ideally, it is suggested to diversify your portfolio with a few fixed-income funds (debt funds) and Equity funds, each fund linked with a specific goal.
A balanced portfolio enhances the overall return and is less volatile than taking extreme positions in one type of asset.
Being an Advice Seeker
Smart investors never think twice, before taking professional advice if they are in need. Taking professional advice should be your habit, even if you have adequate knowledge of investing in mutual funds and about the market trends. Also, you need to identify the differences between professional advice and the occasional advice that you get from your family and friends.
Seek help from a qualified market professional in making your portfolio relevant to your goals. Keeping your goals aligned with the portfolio will help you keep away from chasing the return no matter what the risk is. Seeking professional advice will help you ignore the recent market noise and keep you focused on your goals.
For any kind of query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).