Monday, November 3, 2008

Mutual Funds portfolio is showing a loss ! what should I do in this markets ?

Markets by there very nature will always either go UP or go DOWN. Its a know fact over the years market will surprise most of the times to most of the people. I knew of people who predicting the markets will touch an index 25000 in january 2008 when it was around 20000 now the same people a predicting doom, they are predicting market will go down to 5000 . This may be true or may be not, but the point is markets will always surprise and you need to have patient and understand that it will behave the way it is.

The following are few Rules to follow during tough times.

1) The smartest set of investors are those who even in this trying times dont stop there investment Plans. You should continue doing your SIP in good funds.

2) Analyze your Mutual Fund portfolio or get it analyzed by a Financial professional.
Get rid of the non-performing funds. (The funds which has given comparatively lesser returns then the benchmark or it's similar comparable peer group of considerable amount of time)

3) Get rid of aggressive funds and move more of your allocation to more stable large cap funds.

4) If you cannot accept too much risk then opt for a Balanced Funds.

5) STICK to you Financial plans; do not change your investing plans with short term fluctuations in markets.

This ups and downs are more of an opportunity for us to buy things at a cheaper price.
Try to look for oppurtunity in every adversity !

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