How much did mutual funds earn yesterday?
Source: Value Research Now you wonder what contributed to those gains in all those mutual funds. Well, first you have to remember that the market fell over 1,000 points on Monday as the US Fed spooked investors with some very hawkish statements. Investors became extremely concerned about the possibility of a sharper rise in interest rates and a recession. Yesterday, the same investors got adventurous and were confident that things weren’t going to go badly. Mutual fund managers say all the factors remain the same and these wild swings only underscore the problems that continue to haunt the market.
“We have relatively seen strong growth and a healthy corporate earnings cycle as positives, but a worrying current account deficit and high inflation as challenges. India’s stock market and currency have largely outperformed emerging markets in general and this high basis may mean that significant additional outperformance is difficult in the short term. In the long term, the fundamentals of the Indian economy are much more attractive than those of most emerging markets, “says Manish Gunwani, CIO- Equities Nippon India Mutual Fund.
We said earlier that mutual fund investors should not be swayed by these sudden declines and increasingly frequent gains. Of course, you would be swayed by those comments that it’s time to buy more. All you have to do is go back to your basics. Sit on the money and buy and sell strategies are for traders. You have another full-time job and you can’t follow the market and make investment decisions based on hourly market moods.
Again, remember your financial plans. Tell yourself that you are investing in stock mutual funds to achieve your long-term goals. Do you have money you can invest for the long term? Only then should you pay attention to reviews about buying more. Most average earners won’t have extra money to invest for the long term every time the market drops 1,000 points.
That said, it’s time to be extra careful. ETMutualFunds told readers that this year is going to be tricky. So play it safe and exercise caution. Remember that now is not the time to be adventurous.
