Ask ET Mutual Funds: Should I wait for downfall in the market?

I want to invest Rs 3 lakh one-time investment in mutual funds. It seems, the stock market is near all-time high. Should I wait for a downfall in the market? Or I can invest now -- considering the fact that I aim for medium-term investment?

--Nirmal KK

First, equity is a long-term investment. Invest in equity mutual funds only if you have investment horizon of five years. You should invest in these schemes only to fund your long-term financial goals.


It is not wise to link your investments to market conditions. Nobody can predict with certainty the future course of the market. That is why investors are typically asked to stagger their investments in equity mtual funds over a period and wait for five to seven years to reap the benefit of their investments in stocks.

If you are still keen to invest, you can consider investing in an equity-oriented balanced scheme like HDFC Balanced Fund through a Systematic Investment Plan (SIP). Balanced funds are ideal for newcomers to the market as they invest in a combination of equity (65 per cent) and debt. They are less volatile than pure equity schemes that invest most of their corpus in stocks.


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