Missed out on rally? Stay in, but with long term in mind

Mutual fund investors who missed out on the market rally in the last one month as they exited early to limit losses, can still re-enter, but with long-term gains in mind, say experts, Sachin Dave reports.

Mutual fund investors who missed out on the market rally in the last one month as they exited early to limit losses, can still re-enter, but with long-term gains in mind, say experts.

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The Sensex has given around 25% return since January 2012.

Retail investors should not just enter the market because it is performing or exit when it is under-performing in the short term, say analysts.

“There is a behaviour gap between investor and investment that is caused by emotions, when retail investors exit at any correction and flock back when there is any rise (in markets),” said Amar Pandit, a Mumbai-based financial planner.

"Investors should realise that they would gain more by staying in the market in the long term."

Around 1.6 million investors have exited MF investments in the last fiscal year as returns slowed down, the Association of Mututal Funds of India has said.

According to Value Research, around 70% of the major mutual funds have witnessed a fall in their assets under management.

The highest return clocked by any fund house is 8% in last one year.

Analysts say that retail investors should review their portfolios every year and exit scheme that are not giving good returns.

However, they should not exit schemes with good track record.