Mutual Fund Strategy: Investors in the equity market have become cautious these days due to the fluctuations in the stock market. The Sensex has seen a decline since its record high and has broken more than 3,400 points in the last 10 days. The market reached its record high on 16 February. SENSEX touched 52516 level. At the same time, 10 days later, on February 26, the Sensex closed at 49,100 levels. Many such factors are present in the market, due to which this fluctuation in the market can continue for a few days. In such a situation, if you are a mutual fund investor then what should you do. Expert says that after this decline in the market, a space has been found. From here on, mutual fund investors should especially invest in midcap and smallcap funds. New investors can start SIPs.
Current decline in shopping opportunity
BPN Fincap’s director AK Corporation says that in 2021, the stock market will still return fast. There are some factors that have impacted the market in the present time. But these factors are not long term. He says that the fall in the stock market is a better opportunity for mutual fund investors. In the past, those who have done buoyancy in the boom of the market, they can average their investment through new investment. At the same time, this will also give them an opportunity to increase the unit. If the market gets faster then they will get the benefit.
The corporation says that the US’s strike on Syria is the major reason for the fall. At the same time, the increase in bond yield is also a reason. But central banks around the world will not allow bond yields to increase more than a limit. At the same time, long strikes do not seem to deteriorate due to air strike. All these will not affect the economic recovery of the country.
Where to Boying, Where to Avoid?
The corporation says that beyond this stage, there will be a spurt in midcap and smallcap. LogCap has a higher valuation. Most stocks are at or near 52-week highs. So right now midcap and smallcap are looking better. If investors have the ability to bear the risk of the market, then money should be invested here. On the other hand, if investors do not want to take risk, then balance advantage fund is a better option. Apart from this, they can adopt asset allocation strategy. Some allocation in the portfolio may also come from the largecap and midcap segment.
Date pressure throughout the year!
Experts say that negative returns have started coming in debt mutual funds. The reason behind this is that the 10-year bond yield has come down. This boom can be seen in many countries including America, India and Japan. This will affect the bond market. However, RBI’s plan is to buy bonds aggressively. But the situation will be clear about this. Recently, investors should stay away from debt segment.
Start or continue SIP
According to experts, if SIP is already running then continue it. At the same time, new investors can start SIP for long term in different categories of equity according to their need. On the decline in the market, it can also be made top-up.
(Disclaimer: Investing in mutual funds is subject to market risks. Before investing, check at your level or consult your financial advisor. Financial Express does not recommend investing in any fund.)