With benchmark indices in India touching their all-time high – BSE Sensex touched their historic highs at 61,000 mark in October last year, it might be enticing for the bulls to assume the moment to linger and for the bears to continue sitting on the fence and hopefully waiting for the markets to correct. However, what one fails to realise is that timing the markets is a pointless exercise. If you are an investor who is prepared to stay in the markets for the long run, it is never a bad time to enter the markets. Even if you enter when the markets are touching its peak, like it is doing currently. Let’s understand more such things that you can come handy while investing in mutual funds when the markets are at its all-time high.
Things to remember when markets touch their peak
Following are a few things that mutual fund investors must be considerate about when investing in the mutual fund investments when the markets are high:
- Stick to your SIP investments even when the markets are high
One of the benefits enjoyed by SIP (systematic investment plan) investment is the rupee cost averaging it offers to investors. Rupee cost averaging helps investors to average out the total cost spent against buying mutual fund units as SIP investments ensure that an investor invest through both – ups and downs of the market. Your investments in mutual funds through SIPs must not be based on changing market valuations, but rather your savings. - Check the long term performance of your investments
Rather than looking at the past performance of your investments, it is advised to look at the long term performance of your mutual fund schemes. This is because there are chances that the recent performance report might not show you the clear picture of your investments and might result in you making an uneducated investment decision. - Stagger your investments and diversify your investment portfolio
It’s always a good idea to stagger your investments across a variety of investment options, asset classes, and location. This will help to diversify your investment portfolio which will help to reduce the overall risk possessed by your investment portfolio. - Stagger your investments through systematic transfer plans
Another strategic idea to protect yourself from the ever volatile and unpredictable markets is by staggering your mutual fund investments through a systematic way of investment through STPs (systematic transfer plans). Using STP, you can systematically transfer your funds from debt investments to equities in a staggered and systematic manner. - Choose funds based on your investment portfolio
It is always advised to invest in mutual funds after careful analysis of your risk profile, financial goals, and investment duration. This will help you choose the right type of investment for your portfolio basis your requirements.
If you are still unsure about your investment decisions, you might consider taking the services of a mutual fund expert or a financial advisor who can help you with your investment journey. Happy investing!
