Navigating Volatility in Your Equity MF Portfolio

You may have noticed a significant dip in your equity mutual fund (MF) portfolio over the past week. While we've seen similar downturns in recent quarters with swift recoveries due to temporary domestic factors, this time the decline is driven by global events, suggesting a slower recovery. Understandably, this might leave you wondering what steps to take next. [EasyDNNnews:PaidContentStart]

My advice is to stay invested. Equity is inherently a long-term investment, and your decisions should not be influenced by short-term fluctuations. The ideal approach to investing through mutual funds is to tie each investment to a specific goal, guiding your entry and exit strategies based on the achievement of these goals. If your investment goal is still in the future, there is no reason to panic. 

If your SIPs (Systematic Investment Plans) are not tied to specific goals and are aimed at wealth creation, it's still wise to stay invested. Wealth accumulates over the long term, and trying to time the market is not advisable. Since we are clear on not exiting your investments now, the next question is whether you should invest more or top up your current investments. 

I recommend not rushing into lump-sum investments. If you wish to invest more, consider doing so in a staggered manner to mitigate risk. 

Most importantly, it is a good time to rebalance your portfolio. If you have invested heavily in PSU, Small-Cap, or Mid-Cap themes that have delivered outsized returns recently, their weightage in your portfolio might be disproportionately high. Now is an appropriate time to rebalance by adding themes that have underperformed, ensuring a well-diversified portfolio. 

Stay invested, rebalance thoughtfully, and continue to reap the long-term benefits of equity investments.

Shashikant Singh
Executive Editor

[EasyDNNnews:PaidContentEnd] [EasyDNNnews:UnPaidContentStart]

[EasyDNNnews:UnPaidContentEnd]