FIVE MUTUAL FUND STRATEGIES TO KEEP IN MIND AS MARKETS HIT NEW HIGHS

Investors all over are worried to death as the BSE Sensex touch the all-time high of 61,000 mark. This sudden surge in the markets often makes an investor super cautious of their next investment decision. However, one must realise that excessive caution might not good them any harm and might even harm their investment portfolio. Either they commit the mistake of selling of their mutual fund investments and waiting for the markets to correct or they do not invest altogether. Though such investment decisions might be apt for someone who is in immediate need of funds or needs to meet certain expenses in the near future, it may not be an ideal decision for other investors. Such investment decisions could significantly harm an investor’s wealth creation journey. So, what should an investor do when the markets are sitting at their all-time highs? In such situations, one must adopt a strategic approach that helps them make the best out of the situation and also helps them stick to their investment basics. In this article, we will discuss five such investment strategies that you can adopt when the markets soar high.

Mutual fund strategies to consider as the markets touch their new record

Here are a few strategies that might come handy when the markets are soaring high:

1. Avoid making a lumpsum investment in equities and equity-related securities
   When markets are at their all-time highs, investors are often advised by their advisors to stay put with lumpsum investments in equities. Instead, they might consider adopting the SIP approach or commonly known as systematic investment plan. This is because SIP investments have the potential to stagger your investments and provide you with the benefit of rupee cost averaging.
2. Diversify your investments
   In order for your investments to succeed and help you meet your investment goals, it is important a adopt a rigorous asset allocation strategy. You must not invest all your money in single asset class or investment. Instead, you must look for ways to appropriately diversify your investments across location, asset classes, and types of investments. This will help you eliminate the risk of concentrating all your funds in one place and would also help to spread your risk at the same time.
3. STP mode of investment
   STP, short for systematic transfer plan is a way to systematically move your investments from one asset class to another or from one type of investment to another of the same fund house. This mode of an investment could be an ideal investment mode in bull market phases. Investors widely use this mode of investment to systematically move their funds from debt funds to equity investments in a staggered manner. STP investments can be a deal changer for an investor as it not only helps investors to systematically invest in equities, but also helps them earn reasonable and decent returns from their debt investments. 

Hoping that the above-mentioned strategies turn out to be useful for your investment portfolio. Always ensure that you regularly track and monitor your mutual fund investments. Happy investing!