Multi-cap funds for Conservative Investor
Ninad Ramdasi / 11 Jul 2024/ Categories: DSIJ_Magazine_Web, DSIJMagazine_App, Letters to Editor, MF - Letter to Editor, Mutual Fund
Multi-cap funds for Conservative Investor;
With multi-cap funds gaining popularity in India, how should a conservative investor like me approach this investment avenue? - Avinash Juneja [EasyDNNnews:PaidContentStart]
Editor Responds : Multi-cap funds are gaining popularity in India and for good reason. They offer the potential for growth and diversification by allowing investment across large, mid, and Small-Cap companies. However, for a conservative investor like yourself, there are some important things to consider before diving in.
The inherent risk of multi-cap funds is a key factor. Because they invest in mid and small-cap stocks, they are more susceptible to market volatility. These segments can experience larger price swings compared to Large-Cap companies. To mitigate this risk, a long-term investment horizon (ideally 7-10 years or more) is crucial. This allows the market to even out fluctuations and potentially lead to better returns in the long run.
Recent trends show that multi-cap funds have performed well. However, remember that past performance is not a guarantee of future results. The Indian stock market, like any market, experiences ups and downs. Be prepared for potential volatility.
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