The BJP's victory by a huge margin in the assembly elections is drawing many retail investors to the markets through mutual funds. Of these, many are first-time investors. "Valuations are high and corporate earnings are taking time to catch up," says Vishal Dhawan, chief financial planner, Plan Ahead Wealth Advisors. He believes retail investors should not get carried away by the bull run and should not allocate all their money at once. Instead, he suggests, they use a staggered approach using balanced funds. This will ensure they weather the volatility in the markets over the next few months. For tax calculations, balanced funds are treated as equity funds, and gains through them are tax free after one year.
Midcap stocks that find no takers among active fund managers. Check your portfolio
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