investment strategy: survival kit for mutual fund investors in a volatile market

Many mutual fund investors are extremely worried about their investments. They were already worried about impending interest rate hikes, tighter liquidity conditions, and Russian aggression made things more complicated for them. Foreign investors have been selling Indian stocks for some time now. Soaring oil prices and talk of nuclear options will keep the market in the doldrums for some time. In this context, what can mutual fund investors do?

Do not do anything

This is what most mutual fund managers and advisors have been telling investors for some time. These experts say investors shouldn’t be guessing what central banks around the world are going to do or what foreign investors are going to do. They say we are dealing with variables in an emerging situation and the best thing for mutual fund investors to do is to do nothing at this point. Let your mutual fund manager do their job.

Cut the noise
Many new investors are in the market. Moreover, many new social media experts offer instant solutions to market problems. These experts who have been in the market for a few years cannot offer you anything worthwhile. Their quoteable quotes can be entertaining. Don’t give them more importance. There are many chapters in the book that these experts have yet to internalize.

What is worrying you ?
Are you new to the market? Are you concerned about general market conditions? If so, as said before, do nothing. This does not mean that you can review your investments. Do you doubt certain decisions? If so, talk to your mutual fund advisor or financial planner. Clear your doubts. If you are still unhappy with certain investment decisions, you need to reconsider your decisions. Look at tax expenditures, charge where applicable, and sell those investments if it can give you peace.

Take no more risk
The so-called new experts are urging investors to venture into riskier investments to maximize their wealth. In the face of losses, many investors bet on these opportunities to recoup their losses and make more money. Do not be fooled? After the market falls, stocks become attractive. But it is relative. Is the valuation really attractive? This is not something a mutual fund investor should worry about. Stick to your initial investment plan. Never invest in choices without taking into account your objectives, your horizon and your risk profile.

Focus on your goals
A bad market phase is a good time to focus on your goals. Being obsessed with the market or tinkering with your investments is the surest way to lose money. Instead, focus more on your goals. This will give you the confidence to continue with your investments. As fund managers say, a bad market can offer very good options. Keep investing to accumulate more units and maximize wealth.

Dolores W. Simon