MUTUAL FUND investors who follow business stories in the media must be a worried lot nowadays. Almost every day, there’s something about the sorry state that the mutual fund business is in India. No less an authority than the Prime Minister of India has recently stated that reviving the mutual funds industry (along with insurance) is one of the five immediate focus areas that he has identified
after taking charge of the finance minister. In the days since, there has been a spate of talk about the various measures that the government may ask SEBI to take in order to revive mutual funds.
However, as an investor, you should completely ignore all this. This has no relevance at all to the funds you invest in, how you choose them and how much money they will make for you. The problems that are being talked about in the media are of concern to the Prime Minister because reduced inflows into mutual funds and insurance mean less investible funds in the capital markets; they are of concern to fund companies’ managements and distributors because they have less money with which to expand their business but they have are of no concern to you as an investor in mutual funds.
From an investment perspective, mutual funds remain as attractive as ever. The sustained, long period during which stock prices have stayed moderate has been a great opportunity to invest regularly. Investments made during depressed phases of the equity markets are what enhance returns in the long run. Investors who continue with equity fund SIPs regardless of the noise around the mutual fund industry or the stock markets or indeed the general negative vibes around the economy are the ones who will reap the rewards eventually.