When equity markets take a hit most people check their portfolios to understand the impact they have suffered. This is true also for investors in mutual fund schemes because they too will suffer when the value of their investments reduce.
Mutual funds that invest in equity are not immune from fall in the markets and in some cases the impact can be severe. For example, if there are funds that have a larger exposure to areas like auto, banking and real estate that have been hit hard in the current fall, they are likely to witness a higher impact.
Investors have to ensure that they are clear about their goals when they invest in such schemes. The outlook and the risk that they take have to be understood so that in cases like these they have a strategy ready to tackle the position. This is required; otherwise a sudden reaction can actually lead to a hit for the investor.
Need for action
Even after looking at past record there may be situations where the particular fund of the investor is not doing too well. In such a position there might be need for some additional steps to be taken like changing the scheme or buying other funds. This action should be carefully thought out and undertaken.