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  • Category: Mutual Funds

    Is this the time to purchase or to sell MF units ?

    Have a query about purchasing mutual funds? Find advice from experts on this page.

    Mutual Funds invest in stocks, bonds and debt instruments and by judicious investment try to give their investors a handsome return. As markets are always in dynamic conditions sometimes going up sometimes down and sometimes remaining stagnant, it is very difficult to make out by an investor when to sell and when to buy.
    Since the last change of government in center, the share markets are almost in a stagnant phase as BSE Sensex which is a traditional bench mark of share market is hovering between 26000 to 28000.
    Now in the present situation if market reaches 28000 or more then the question is - whether an investor should sell his MF units and join the wagon again when the Sensex dips to 26000 level or purchase additional units in the hope of market rising in near future?
  • #140972
    The present government is trying to spell growth in all its deeds, be it budgetary announcements, investments in infra-structure, investments to boost rural economy etc. This is certain to lift the stock markets up. So the stock dependent MFs are sure to do well during the tenure of this government. Accordingly, I do not recommend a 'sell all' at this point. Buying afresh may be a good option too. But all the MFs are not stock market dependent and some of them invest more in securities and bonds. Till date, fixed deposits have not been given much importance in the working style of this government. So MFs investing more in Government securities may not perform well. However, this is entirely my personal view and things may not work this way.

  • #140974
    Thanks Rajesh, for your crisp views.
    Presently we are in such a phase of economy that the interest on loans as well as bank FDs are on a decreasing path and may stabilize somewhere in the range of 8-9 % and 5-6 % respectively.
    Under this scenario the bond market is bound to react and has already reacted in recent times that the bond prices has seen a uptrend. Still they have a comfortable yield as these instruments were issued having interest rate in the range 9-9.25 %.
    So my point is that the MF investing in bond and debt market will also be giving moderate returns if not very good.

    Knowledge is power.

  • #140980
    The government is planning its best to strengthen the economy so that benifits accrued from it is percolated to the common man. Infrastructural developments, health- care and overhaul development of the basic - industries such as Coal, Cement, Steel, Alumunium, Power and Oil - sectors etc would likely to surge in the coming time and as such any investment in mutual fund in the infrastructural bonds, Steel, Cement, Power and Alumunium are definitely to shoot up.
    At present, such investments are not likely to yield result but we need to adopt far - sightedness in the selection of portfolios of mutual- fund and hence this is the right time to buy these stocks and the same may be encashed in the boom - period.

  • #140991
    Please read the full budget speech and the analysis which will be coming in the next few days in newspaper and financial magazines. Watch the financial channels in TV. You may get to know the sectors which are to get boost in the future.
    Naturally you will not be the only person who may be looking for such information. Hence the prices of such funds may go up also now. So you have to short list a few funds based on their performance, the stocks or outlay of those funds. It is however better to spread the risk across sectors and funds.
    If you are a beginner start with only established funds and those having good track record. Also se how the funds are invested.
    Buy and sell of MF s may not be that real time like stock exchange trades. There may not be immediate shocks or immediate gains. Unless you are a seasoned investor, it is better to invest slow and steady, and when you can safely spare money.

    My personal feeling is that there may not be much cause for worry now except for two factors of GST passage and the US policy effect. But as our economy has sufficient space and shock absorbers, I do not envisage a great fall. I expect steady increase only with small corrections periodically.
    Stay invested. Buy slowly and steadily. Take a relook after an year.

  • #141007
    The way the mutual funds are being progressing lately. I think the approach should be holding whatever units you have. You can find some of the affected sectors after the budget. And based on their performance upto august, you have to reshuffle the portfolio. Based on how MF fund house are going. It's not worth keeping the mutual funds for more than 3 years anymore. So you can move to new portfolio. This way you'd be able to avoid old less performing MF Units.

    However based on how some of the companies and sectors performing, it's better to wait for some time. let the market settle in. Also diversify with the ETF and the bonds. Just to be on safe side with the funds. That way you can focus more on the other issues.

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