Stock Market At A High!

What should equity mutual fund investors do now

- Sanjeev Puri

The stock market indices are at high and looks to keep going strong despotically over the long term. However, in the short to medium term, the markets are bound to turn volatile and remain unpredictable. As a mutual fund investor, you need to stay invested for meeting long term goals and take steps to minimize the impact of market turbulence and reap the benefits of long term investing. As a mutual funds investor here are few things that one can do.

It’s absolutely impossible for anyone to predict the movement of markets. Period. Stay from predictors at all cost. Factors affecting market movements have increasingly become more complex, inter-related and dependant on global events as well. Further, there are technical factors too at play. When technical support levels are broken by market, the next level gets projected as the support. But then, markets move on their own and all these support can be broken. Investing based on predictions could be financially damaging. Be invested in markets, one never knows when the markets reverse and bounces back.

All those MF investors, investing through SIP may continue with their SIP’s. And there are convincing reasons to do that. SIP’s are not making all your fund get exposed to market volatility all at once. When index is down, they get more units while when the index rise, the units bought is less. This approach helps in accumulating units, the average cost of which is lesser than otherwise. The risk of volatility gets minimised through SIP approach.