Is it safe to put money in mutual funds considering where the markets stand today? Do I have the risk of losing more money? My investments in funds from Reliance, SBI and HDFC AMC earlier this year are not showing great gains.
Rajan Patnaik, Cuttack
One can understand your concern with investing considering the way the stock markets are going up in recent months. Mutual fund investments have an element of risk depending on the category of fund you invest in. As you have not mentioned the schemes from these AMCs in which you have invested, it is difficult to give you a precise reply. Investment in every mutual fund scheme has a suitable time frame to consider; ideally investments in diversified funds are good with a 3-5 year window. This gives the fund to ride a market cycle with ups and downs and gain with time. It is for this reason we advocate systematic investments in funds so that the cost of acquisition is averaged with considerable net gains over time.
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Patience is the key to profiting from mutual fund investments, however, all these suggestions come to fruition provided you select a good fund that has a consistent performance track record over market cycles and is also highly rated. You can select funds from the OLM Elite based on your profile or the Stellar List, which has just been released.
