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  • Category: Miscellaneous

    Dividend depletion in good balanced funds- a cause for worry.

    With COVID 19, the returns from mutual funds and other deposits have reduced considerably. Experts do not advise any fresh investment in such schemes and we better be careful. The only safe bet seems to be the Post Office Regular income scheme for senior citizens. One is told that the sentiment at the National Stock Exchange is bleak for another six months; by this time, if at least some drug is found out that can arrest the spread of the virus, things will be somewhat back to normal. Given the present circumstances, only nationalized banks and the good private sector banks are reliable. What is your opinion?
  • #697435
    Mutual funds invest their corpus in shares and other instruments in the market and if the share market tumbles it is natural that mutual funds would also go down in the same proportion. Depending upon whether the fund is equity oriented or debt oriented the downfall would be more or less. In this situation the fixed deposits in bank and Post Office schemes are the only alternatives. People who have invested in the share market and mutual funds heavily have to wait for a long time which of course depends upon the end of present virus crisis and a lot of uncertainty is there in that respect. If they sell their holdings now they would be incurring huge loses. A shrewd investor would wait for even years to see his investment come back to earlier levels. Investment is a matter of risk and speculation. There is no advanced Mathematics in it. Some visionary investors buy shares and mutual fund units in adverse time only to reap the benefits at a later date. But it has associated risk also. Stock market is for those who can take risk and park their money idle even for a long duration.
    Knowledge is power.

  • #697453
    Mutual funds are not doing well. The returns are not as before. It is expected. Keeping money now in these instruments may not be a good deal. But withdrawing at this moment is also not correct. As already we have invested in those funds we have to wait for good times. I hope good times will come back shortly. Let us see.
    Even FD rates are also coming down and the monthly income for senior citizens is coming down because of this and they are finding it difficult to carry on.
    But no option available Slowly the activity is starting back and normal says may come in a year or so. Then we may get good returns from these Mutual Funds. The packages given by the central government may give some chance to industries to do well and that will make the share market encouraging. Only thing is waiting is necessary.
    FDs in good banks is the best bet as of now for fresh investments if anybody is planning for that.

    always confident

  • #697494
    I think the thought of investment may not come to mind for most peole now(except for the professional investors and brokers). Ordinary people are now worried when and how they wil resume work and business and what will they earn. Salary earners are worried whether there will be any reduction or deduction from their salary. Those who had already kept FD s and live on the interest from them are now worried about the contnuously decreasing interest rates.
    Market investments are prone to capital erosion risk and that sahudders the odinary mind to even to think of investment now. Let things return back to near normal at least.Now life and health are the priority.

  • #697520
    In continuation to my earlier response I want to add that to mitigate the present tough situation faced by the mutual funds, RBI had announced a package for them to help them in this difficult condition. So, people who due to some reasons want to exit the scheme by taking whatever money they are getting from the current redemption of their holdings, can do it happily as mutual funds would pay them the present NAV amount accordingly. The cash crunch with mutual fund houses is resolved subsequent to the RBI package announced for them.
    Knowledge is power.

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