Stock Market Opening: Weak opening of the market, Sensex opened on a decline of 400 points

Equity Mutual Fund: Take advantage of fluctuations in the stock market like this, know where to invest


new Delhi. For some time, there has been a flurry of volatility in the global and domestic stock markets. After the Russia-Ukraine crisis, markets around the world have declined. Given the geo-political tensions and the rise in crude oil, investments are currently pulling back from investing in the stock market. However, if you invest in Equity Mutual Funds, you can earn profits in this period of volatility.

Tax expert Balwant Jain says that the day Russia attacked Ukraine, the Sensex had fallen by 2,702 points. A day after that, there was a boom in the domestic market. The Sensex lost 3.41 per cent during the last week. In such a situation, if you want to invest in equity mutual funds, then definitely assess your risk as an investor.

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Make a risk assessment
Equity Mutual Fund is completely subject to risk and it is completely dependent on market risk. This means that whenever there is a downturn in the market, the investors’ portfolio shrinks, while in the bullish period, they make profits. Therefore, financial discipline is essential for those investing in mutual funds. Under this, along with asset allocation, you must review your portfolio from time to time. This not only keeps the investment safe but also gives better returns.

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Invest in different categories
There are different categories of Equity Mutual Funds. It can be smallcap, midcap, largecap and mixed cap. The asset allocation is different for different categories of mutual funds. The fund should be selected on the basis of how much risk the investor can or should take. It is important for investors to diversify their portfolio to avoid the risk of market volatility. This means that midcap, small cap, large cap should be included in your portfolio.

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If the market falls, then the emphasis on smallcap
When the market starts a phase of volatility, both the time of ups and downs affect the units of the mutual fund. However, the impact of largecap funds is less, while smallcap funds see more volatility. In such a situation, investors can increase or decrease their investment in smallcap, midcap and largecap as the volatility increases. When the market declines, you can increase your investment in smallcaps. It can give higher returns when it picks up.

Invest for long term
Investment advisors say that the emphasis should be on investing in mutual funds for the long term. If you invest for a long time, you can get manifold returns and your risk is reduced. Fund review is essential while investing, but doing so on a daily basis adds to the stress. So review your portfolio three to four times in a year. Waiting for a longer period can give great returns.

The math of investing right
There is a rule of ’15 times 15 times 15′ for investing in mutual funds. It suggests that if you invest in mutual funds for 15 years or more, you can get returns of up to 15 per cent and become a millionaire. According to the mutual fund calculator, if you invest 15-15 thousand rupees for 15 years, then after 15 years on maturity, you will get an amount of one crore.

Don’t pretend to sell shares out of fear
Hiren Vaid, director of Alchemy Capital Management, says that in the phase the stock market is going through, investors should not sell their shares out of fear and mindlessness. History is witness that the market collapsed on several occasions of geo-political tensions and wars in the past, but then also made a rapid comeback. Therefore, from an investor’s point of view, indiscriminate selling of shares during any crisis is unwise. This should be done only when it is very necessary, otherwise it can have the opposite effect.

Tags: stock market, stock market today


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