Sensex, Nifty 50 hit fresh record peaks: What should Mutual Fund investors do

So, how can mutual fund (MF) investors make the most of such situations when equity markets are at an all-time high? The celebrations at Dalal Street have brought cheers to the stock market investors, experts suggest that MF investors should not get carried away to book profits. They should religiously continue with their SIPs, like in the bearish phase of the market.

“Just like we see “correction as a celebration” during falling markets and never stop SIP investments, even during rising markets we should continue SIPs because this level could very well be a low point when seen in the future if markets continue to rally. If we book profits and exit, it could become very difficult to enter again at higher levels.” said Anil Ghelani, Head- Passive Investment and Products, DSP Mutual Fund.

“The Nifty 50 and Sensex have surged to record highs. Investors should resist the urge to liquidate all their holdings but consider reducing their stakes in companies that appear overvalued or have weak financials. Instead of attempting to predict market peaks and troughs, investors should base their decisions on long-term objectives and avoid being swayed by short-term market fluctuations,” said Palka Arora Chopra, Director – Master Capital Services Ltd.

For mutual fund investors, the key is not market timing but the duration of their investments, as this is when the true power of compounding comes into play. “Even in the midst of the current market rally, it is crucial to adhere to your asset allocation strategy and periodically adjust your portfolio to maintain the desired balance,” said Palka Arora.

Mutual Funds: Strategy for SIP, lump-sum investors in a bull run

Experts say that over the long term, it is anticipated that market trends will be positive, which will ultimately be advantageous to SIP investors.

“Given the state of the market, lump-sum investors would wish to proceed cautiously,” said Amit Gupta, MD, Sag Infotech. 

Another mistake investors commit is to invest a lump sum during a bull run. “Although the markets are not in a bubble, they are unquestionably pricey. We are not comfortable investing our money in the market in a big amount, at least not right now,”  added Gupta.

Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

Updated: 15 Sep 2023, 02:58 PM IST