With markets being comparatively down, Mutual Fund (MF) portfolios have become interesting and thus either lump sum investment or through Systematic Investment Planning (SIP) should be looked positively, point out financial and tax experts. The stock and shares prices are currently trading low – from an unprecedented high a few months ago. This would help investors investing in stock and mutual funds to buy at low prices. SaysAnand Radhakrishnan, Chief Investment Officer, Franklin Equity, Franklin Templeton Investments – India: “Firstly, retail investors must not venture directly into stock markets as it is only meant for seasoned professionals. Mutual funds are the best route for retail investors to invest for their goals as they help to beat inflation.”
According to Radhakrishnan, one can choose various mutual funds based on one’s risk-taking ability since they are market-linked unlike assured returns products. In addition, the time available to reach one’s goal is another important factor. They must, however, stay invested for a medium term horizon of 3 to 5 years, advice experts. “In case time available is more than five years, one can choose equity mutual funds. If the goals are less than five years away, one can choose hybrid mutual funds (mix of equity and debt funds) or pure debt mutual funds. It is also important to invest across equity, debt, gold and real estate, among others (known as asset classes) so that risk is spread out, also known as diversification. Our advice to investors would be to invest in line with one’s financial goals and risk appetite rather than focus on market conditions and fads. Investing through Systematic Investment Plans (SIPs) and diversifying across asset classes is the best way to deal with market volatility and benefit from it,” he says.
