Don’t sell your mutual funds now, or you will regret later: Motilal Oswal CEO’s advice to investors

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Published: March 19, 2020 6:30 PM

Since the start of March, S&P BSE Sensex has tanked more than 24 per cent and is now standing where it was in December 2016, down at 28,288 points.

Since the start of March, S&P BSE Sensex has tanked more than 24 per cent and is now standing where it was in December 2016, down at 28,288 points.

Advising investors against redeeming their mutual funds and stocks due to ongoing share market crash, Aasish Somaiyaa, Managing Director and CEO Motilal Oswal Asset Management, said that investors who redeem right now will regret their decision. “You will regret it, and that day will not be in a few years, it will be a few months or few quarters down the line,” Somaiyaa wrote in a blog post on Thursday. He added that investors should do what they are comfortable with even if that means not investing. The comments were made as domestic equity markets continued to witness a sell-off and extended their weekly losses.

Adding that markets have lost the ability to distinguish between good and bad investment, Somaiyaa said that while some investors are selling their stocks, not without a reason, others have mirrored their move without completely understanding the reason. He advised investors to stay away from the ‘circus’. Indian equity markets have been trying to factor in the losses that have been triggered as fear of coronavirus continues to rise with a growing number of cases in India and across the globe. Even large cap companies that have sound fundamentals are taking a pounding on the stock exchanges. “Pretty much everything is painted in the same brush; equity is bad right now – period,” he added.

Since the start of March, S&P BSE Sensex has tanked more than 24 per cent and is now standing where it was in December 2016, down at 28,288 points. The broader NSE Nifty-50 is well below the psychologically important 9,000 mark after falling another 205 points on Thursday to trade at 8,263 points. Marquee names like ITC, HDFC Bank and Tata Steel are all facing the heat, recording double digit fall since the beginning of this year.

Somaiyaa ended with a piece of advice for investors to refrain from selling ‘when/because foreigners are selling” He added, “They are selling for their own set of reasons. They are selling all over the world, they are not selling because India is bad. I have seen this in 2008. They sold in 2008 and we panicked. In 2009 and 2010 after our markets fell and currency depreciated, they bought back everything and more. Till date we have not seen the kind of inflows that we saw in 2009 and 2010.”

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