Here are a few guidelines that can help you manage your mutual funds in the current market scenario.
- As a rule of thumb, investors are advised to not predict the markets owing to the cyclicality aspect. It refers to the fact that markets are fluid and are prone to upward and downward trends over time.
- Defining clear, realistic and achievable investment goals and revaluating them from time to time could ensure continued growth.
- An ideal investment strategy at such times would be to diversify one’s portfolio. A mutual fund portfolio that includes a healthy mix of aggressive and risk-averse investments could be sensible move.
- Historically speaking, a downward spiral is looked at as an opportunity to buy low and sell high by increasing equity exposures when markets have fallen and vice-versa.
- If your investor profile happens to be more conservative then you can consider investments in hybrid funds to cushion your risk further as you get to diversify your portfolio by investing in both debt and equity.
- Those with a more aggressive risk profile can explore investment options under equity funds as an ideal step towards wealth generation in the long term.
- One can also consider creating an emergency fund to help them align their finances in case of any unfortunate events.
- Investments through a Systematic Investment Plan (SIP) can be considered as they provide rupee cost averaging to even out your costs over the investment period.
- Always aim to ‘buy low and sell high’ redeeming now means you are doing exact opposite.
- Staying invested across market cycles helps you to reap the benefit of compounding.
- Despite short term volatility, markets have created wealth over the long term.
- Spend more time in the market to create potential wealth than timing the market.
While the above guidelines can help you navigate through the market, it is prudent to relook, re-evaluate and align your investment strategy to your financial goals, appetite for risk and time horizon for which you wish to stay invested.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.