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Mutual Fund Investment: Should you wait for the market to fall? Expert advice for new and existing investors

History suggests that once the clouds of geopolitical turmoil start dissipating, markets handsomely reward patient investors.

Mutual Fund investing, investor, all time high, volatility, stock market
Whether you are new to investing or an existing MF investor, here is how to manage volatility amidst geo-political tensions.

MF Investment: Many investors might have missed the bus when the stock market reversed from the lows of March 2020. Trying to time the market may not always work to an investor’s advantage. But, amidst the rising inflation, interest rate hikes in the US and the geo-political tensions, the stock market indices have fallen from the highs seen about six months back.

So, what should be the approach for equity mutual fund investors – both new and existing investors? Kashyap Javeri, Fund Manager, Emkay Investment Managers, shares his views on the current economic conditions and the future outlook that equity mutual fund investors can expect.

On mutual fund investor’s expectations

We are currently at interesting cross roads. All the indicators on growth on the domestic side are on upswing, viz., E-Way bill issuance (2-year CAGR at 11%), credit growth (8.5% YoY), balance sheet deleveraging for corporate/financial services companies and robust government spending.

It’s just a matter of time that corporations take cue from government infra spends and consumption demand growth and get into capex mode. On the flip side, the global economic climate has worsened quite a bit with hawkish fed and geopolitical turmoil.

History suggests that once the clouds of geopolitical turmoil start dissipating, markets handsomely reward patient investors. Hence, we believe that volatility, if any that occurs in the market, shouldn’t be looked at from the point of view of returns but from the point of view of entry.

Should one wait for market to fall more

Existing mutual fund investors – Stay patient. Eventually the equity market returns will be decided by two things, viz., strength of domestic economy and global financial stability. We believe that in the long term, both would be in favor.

New mutual fund investors – Use discipline in investing if you’re investing for the first time. Nowadays SIP options are available even in PMS/AIF, use them. Being disciplined is the best you can do, the returns will be taken care of automatically.

Those waiting for the market to fall as the indices are at near all-time high levels – The best of the experts in the market haven’t been able to do the same. Don’t even attempt.

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