Mutual funds should i sell

Font Size Abc Small. Abc Medium. Abc Large. Getty Images. Some equity mutual funds investors are contemplating stopping their SIPs or systematic investment plans , while some others want to know whether they should sell their entire investments. The reasons for stopping or selling their investments vary: some are scared of the market touching all-time high while others are scared of weak fundamentals. Even as one deals with these doubts, a new set of investors want to know how to invest in equity mutual funds.

Now you know why many investors are confused. Mostly one group always gets the upper hand. But the market has given phenomenal returns. Under the lens NFRA member under lens for audit gaps in fraud-hit firm; cloud over selection process for regulatory posts.

Subscribe to ETPrime. Browse Companies:. Find this comment offensive? This will alert our moderators to take action Name Reason for reporting: Foul language Slanderous Inciting hatred against a certain community Others. Your Reason has been Reported to the admin. Fill in your details: Will be displayed Will not be displayed Will be displayed. There are NFOs which have delivered higher returns than their peers that already exist.

The point is you should never invest in mutual funds just because the NAV is low. The older the fund becomes, the higher the NAV will be. Everyone wants to have guaranteed returns, irrespective of what investment they choose. But there are no guaranteed returns in mutual funds. Even debt funds, which are considered by many as risk free, may not provide guaranteed returns regularly. Let us take the example of a Liquid Fund which is considered to be one of the safest categories in the mutual fund universe.

So, expecting a guaranteed return from a mutual fund is wishful thinking. Past performance of a mutual fund does give us a fair idea of how efficient the fund manager was in picking up the right stocks at the right time.

But that was in the past. There is no guarantee that the fund will repeat its past performance in future too. Let us take an example of two funds where the performance has changed over a period of time. From the above table it is clear that Scheme A which performed better than Scheme B for three periods ending in was not able to deliver the same performance after three years.

So, the past performance should not be the only criteria while selecting the fund for investment. Investors should scrutinize every aspect of funds rather than depending only on the past performance.

While comparing the performance of funds many investors tend to compare apples with oranges. They just focus on how much return the fund has given without considering whether the funds belong to the same category and other aspects of the funds.

Comparison should be done with the right peers and the right benchmark. You cannot compare the performance of a small cap fund with a large cap fund, as both the funds invest in different sets of stocks. SBI Bluechip Fund should be compared with other large cap funds and its respective benchmark, i. This anxiety and unthinking behavior, many times, makes us take irrational or even harmful decisions for ourselves. The investing information provided on this page is for educational purposes only.

NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks or securities. Because of that you may have seen some scary numbers when you've checked your portfolio. Here are five signs that it might be time to sell a mutual fund. This might sound counterintuitive — after all, performance equals return. But outsize performance is another matter: If a fund did significantly better than its peers, you want to find out why, says Paul Jacobs, chief investment officer of Palisades Hudson Financial Group.

Dramatic short-term gains could quickly turn into a crash-and-burn scenario. If you want to see the entire breakdown of holdings for a fund, you may have to review the fund's official disclosure documents, which should also be on its website. Rate Story. Font Size Abc Small. Abc Medium. Abc Large. Getty Images You may switch if a fund underperforms consistently for two or more years. There are obvious ways around this problem, like advisers or websites or just asking around. Strangely, more knowledgeable and more involved investors face this problem a lot more than others.

The reason is that those of us who are active and involved investors always have an urge to do something. Such investors generally do well because they learn, analyse and act more than others. Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.

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