Mutual Fund Strategy: The rally that began in the last quarter of the year 2020 in the stock market is also continuing in 2021. In the very first month of 2021, the SENSEX has crossed the level of 50 thousand. Although there has been some weakness in the Sensex since touching the level of 50 thousand, the market valuation is now looking high. While there is pressure on the economy, this boom in the market is also alerting investors. Expert says that investors should be careful of stock specifics trading due to the current valuation, because if a negative trigger comes, the market may increase. In such a situation, the question arises that what kind of strategy should mutual fund investors work on. What should they do about equity funds?
No denial of possible correction
Director of BPN Fincap AK Nigam says that the market is currently at a high valuation, in such a situation the potential correction cannot be ruled out. In this boom of the equity market, many stocks are also at a high valuation. But it is not that there is going to be any big fall in the market. The earning season is going better so far. Some important announcements in the budget can give a new direction to the market. However, pressure can be seen in the market till the budget.
Profit book of 25 to 30% of equity portfolio
He says that if we talk about the next few days, investors can book profits of 25 to 30 per cent of their equity portfolio, if there is a need, given the possible decline. The remaining investment should be allowed to remain. Those who take out 30 percent investment, if they fall further in the market, then invest back. Because after the fall the market will get the space to rally ahead. The way reforms are being done to bring the economy back on track, there will be a boom in the market ahead. In the equity segment, he has relied on midcap. They say that the valuation of LorgeCap has become too much. But there is still a lot of rally in the midcap. Economic recovery will benefit midcap companies.
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Put 15% money in Balanced Advance Fund
Expert says that there is a possibility of market fluctuations till the budget or even beyond. In such an environment, mutual fund investors should invest 10 to 15 percent of their money in a balanced advantage fund. It can be a better option than an investment like FD. Balance Advantage Fund is better for those who are looking for a safe investment option instead of greed for higher returns.
Equity, debt and government securities and money market at the same time provide an opportunity to invest in balanced funds, which makes you an investment diversifier. This is a better option for those who do not want to take market risk. The ratio of mutual fund investment in these funds is either predetermined or may vary over a period of time.