Geopolitical risk is expected to continue further, making the market supervolatile. In such a situation, mutual fund investors also have a fear of losing money.
Mutual Fund SIP Strategy: Russia has launched a military attack on Ukraine. Russian action has shaken the capital market. There is also a huge decline in the domestic stock market. Today the Sensex lost about 2000 points in intraday. At the same time, Nifty also came under 16500. This decline in the equity market has been going on for several days and in the meantime several lakh crores of investors have been cleared. In today’s fall itself, investors have got a shock of 8 lakh crores. Geopolitical risk is expected to continue further, making the market supervolatile. The election results of 5 states including UP can also increase the volatility next month. In such a situation, mutual fund investors also have a fear of losing money.
Whether to stop SIP
AK Nigam, Director, BPN Fincap says that if you have already done Systematic Investment Plan (SIP) in Mutual Fund, then there is no need to panic and redeem the units. This may harm you. Geopolitical risk or whatever factors are negative for the market, are mostly global factors. There is no long-term concern about the market at the domestic level. The outlook for the market going forward is better. But now 1 month or something volatility cannot be ruled out.
In such a situation, instead of panic pausing the SIP or redeeming the unit, mutual fund investors should have the option of topping up the SIP. With this you will get units cheap now. At the same time, when the market moves forward, it will benefit.
What do new investors do
AK Nigam says that if there are new investors then there is a need to be cautious. If you want to invest money in the market, then do not invest all your money in mutual funds at once. Rather, they can divide their investment into 3 parts. New investors can start SIP now with 40 per cent of their corpus. On the other hand, as soon as the stability starts coming in the market, further invest in 2 phases with 30 percent and 30 percent.
Lump sum investment plan
If there is a plan to invest in lump sum, then choose the right fund on the basis of risk and time horizon. Risk takers can now put more than 50 per cent of their funds in midcap and smallcap funds. But if the ability to take risk is less, then focus on largecap or large and midcap only. Such investors should also focus on multicap funds, where your portfolio gets diversified.
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