Bear Market Blues: Should you hold, sell, or buy more equity mutual funds now?

The Nifty has corrected 10% from its highs and some more dip might be in the anvil. Individual investors most of whose money is in equity funds are a worried lot. This is immensely true, particularly in the case of investors who have started in the last 2-3 years. These post Covid years witnessed a huge number of investors venturing into equity funds who have almost seen a one-way up move in these years.

After March 2020 , the first time the Nifty fell over 5% in a month was in October 2024. Investors who have seen their investments going only upwards have seen their investment value dropping for over 45 days now and could get restless.

To educate them on how to approach their investments in this market condition, here are some do’s and don’t for them to follow. As it’s more important to know the don’ts first, they come first.

Conclusion

Such market downturns call for intense review of your portfolio and to reassess your risk appetite. Don’t heed the negative noises as long as you have the right choice of schemes. Markets are bound to bounce back once valuations consolidate to fair levels, corporate earnings improve and FIIs start buying.

Gauging your risk profile through professional advice and the right understanding of the market risk is very important to ensure appropriate asset allocation and to stay calm and unwavering with patience to create great wealth over the long term.

For effective wealth creation through a high rate of compounding, there are no better options than equity-oriented investments like equity mutual funds.

V. Krishna Dassan is Director, Dhanavruksha Financial Services Pvt. Ltd.