Time To Invest In Mutual Funds : MFs are for all seasons

Mutual funds are for all seasons and one need not wait for the market to go up to buy mutual funds. Of course, it always helps if the market goes up after one buys equity mutual fund units, because this will result in appreciation of the NAV of the MF units and the investor will stand to gain. Looking at the current market scenario and sentiments, one might expect the market to go up in the near future. The market currently is hovering around 17,000- level and, barring unforeseen circumstances, one can expect the market to again test the 21,000 level in three to six months time and may even cross it. Which means that the market is likely to go up by about 20-25 per cent from the current level in three to six months time. This means investors who buy mutual fund units now are likely to derive good benefit in the near future.

“It is the right time to invest in mutual funds from a long term horizon and with a right mix of funds. One should not worry about the intermediate market fluctuations or the rise in index levels to make investments in mutual funds. Those who are wary can look at investing in a phased manner or through systematic investment plan (SIP) option,” says Hitungshu Debnath, Executive Director — WMS & Distribution, Angel Broking.

However, the buying and selling of mutual funds cannot be timed. “It is always a good time to invest in mutual funds as one cannot time the market. As long as have a 3-5 years view for your investments, it is a good time to invest. MFs are the cheapest way to equity exposure,” says Abhinav Angirish, Managing Director, Abchlor Investment Advisors. Explaining the importance of investing in mutual funds regularly rather than trying to time the market, Ashu Suyash, Managing Director and Country Head — India, Fidelity International, says “At Fidelity, we say that it is time in the market that’s important and not timing the market. And the best way to avoid market timing is through regular investing, or the systematic investment plans. SIPs are attractive because of their affordability as the monthly amounts tend to be low. More importantly, onger-term investors pay an average price for units over time and this helps beat stock market volatility.” Harsh Joshi, VP and Head - Wealth Management, Motilal Oswal Securities, sums up thus: “Equity mutual funds are advisable for investment for a longer duration of three years or more and we would advise against timing thc markets for investments held for longer duration.”