Time To Invest In Mutual Funds

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.

A fret the brisk raliy since March 2009, the stock market currently appears to be in a consolidation phase hovering in the 16,000-17,000 range. Investors are now waiting in the sidelines, hoping to join the party once the market makes its next upmove. The marker in turn is waiting for the next trigger to start on its upward journey. However, no one knows when the rally will happen, but everybody expects the rally to happen sooner rather than later.

But most of these investors may not know which stocks to invest in and, once the rally starts, they may jump on to the bandwagon and invest in some stocks which they feel will be next multibaggers. Their expectation may be on the basis of mere hearsay or their own gut feeling. They may neither have the expertise in selection of quality stocks, nor the time or the inclination to engage in painstaking research for picking up good stocks. Result: most of them end up with losses and dud stocks in their hands at the end of the rally.

So, what’s the way out for these investors? The answer is simple: buy equity mutual funds. If you don’t understand equities market, buying equity mutual funds is probably much better than buying equities themselves. This is because equity MFs mirror the stock market and when the market is going up, the NAVs of the equity MFs also go up. This appreciation in capital comes without any hassles and much lower risk as compared to investing directly in stock market. There are other reasons too why one should go for mutual funds at this point of time. Let’s look at these reasons to understand the rationale of mutual fund investing.