Managing Mutual Funds in Volatile Markets

Posted On Tuesday, Aug 27, 2013


The Indian equity markets have again plunged today, August 28th, 2013. The Sensex was down by over 300 points at the time of writing this article. To add to the worry Rupee breaches at historic lows at 68 per dollar at around 10:30 A.M. and gold which was said to have lost its sheen, has touched the Rs. 34,238/ 10 grams mark during the day.*

With the algorithm shuffling at all ends, as an investor, what is your next move?

Attempting to move in and out of the market can be costly, particularly because a significant portion of the market’s gains over time have tended to come in intense periods. You may face long odds in trying to time the ups and downs of the market and it may happen that you decrease your exposure just prior to market rallies. Therefore, it is advised to hold on to your securities even if the markets are not moving in a favorable direction.

Here is what Mr. I V Subramaniam, Director, Quantum AMC Pvt. Ltd has to say on investing in these volatile times.

It's important to understand that markets will fluctuate, they have never moved in a single direction nor will they ever move in future. It is advised that you should not panic to such market chaos and not redeem your mutual fund investments. However, you should take it as an opportunity to enter into the equity market or buy more mutual fund units at lower NAV's.

Remember, you should always have a long term approach while investing. Patience is the key in volatile market conditions. It is possible that the security you buy may fall further, but you should not panic and start selling that security in the market. When you invest in the securities market, you are investing in companies. And companies take time to grow. Hence, you should ideally have a horizon of at least 5 years or more for your investments.

Therefore, it is advised not to get carried away by the negative sentiments of the market during a market fluctuation. Being patient works during a market plunge. The investor who stays in for the long term is more likely to achieve his or her goals than the investor who chases “hot tips” for quick profits in the securities market.

* Source: Bloomberg

Disclaimer, Statutory Details & Risk Factors:
The views expressed here in this article are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. Please visit – to read scheme specific risk factors.

Above article is authored by Quantum.

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