On Wednesday i.e 7th February 2018, the market fell for the 7thconsecutive session. Worried about your mutual fund investments and wondering what action to take?Before you do anything, let us first understand why the market has been falling.
1) Budget 2018: Introduction of a 10% Long term Capital Gains (LTCG) tax on investments in equity/equity funds. This move shocked the market and is partly responsible for the selloff.
2) Rising Bond Yields: Concern that the US Fed (similar to the RBI) might increase U.S. interest rates in response to higher inflation.
A combination of hardening yields, weak global equity markets and LTCG tax coming back are impacting the market.
WHAT DO WE RECOMMEND:
Even though the ups and downs of the market, it is important to stay invested to achieve your financial goals.
If your goal is long term then it is safe to continue your investments in equity mutual funds. For near term goals however, it is advisable to rebalance your portfolio.Increase the proportion of the debt funds in your portfolio to avoid short-term fluctuations.
Our advice?Stay calm and stick to your goals. The market is down now, but will catch up and start rising again soon. If you need any further support then feel free to speak to one of our experts.
In fact, weak markets are a great time to invest! Our team has first hand experienced this over the last 20 years. It’s like buying expensive products on sale. So make the most of the situation and stay calm to ride this storm out.
For further support and insights speak with our experts on +918767134134.
