Should Falling Markets Trigger Exit From Equity Mutual Funds?
Dalal Street Investment Journal|June 06, 2022
To better understand the right strategy for dealing with mutual funds in a falling market, we conducted research in which we invested Rs 1 lakh using the plus or minus 10 per cent guideline, the buy and hold strategy and the moving average method. Here are the findings.
Should Falling Markets Trigger Exit From Equity Mutual Funds?

The stock markets are not in a good place with pressure increasing from unfavourable global cues. From mounting inflation worries to the ongoing confrontation between Russia and Ukraine to increased instances of the corona virus that have resulted in stringent lockdowns across China, things have been going horribly wrong. Even in India, inflationary concerns persist, as does the possibility of the Reserve Bank of India (RBI) hiking key policy rates further at the forthcoming Monetary Policy Committee (MPC) meeting in June 2022. Furthermore, Indian businesses are reporting a mixed bag of quarterly (Q4 2022) results.

If we look at the price trend of Nifty 50, we can see that it has been falling since October 19, 2021. On the same day, it reached an all-time high of 18,604.45, which it attempted twice but failed to attain. Nifty 50 has dropped 12.85 per cent so far, indicating that this is a price correction rather than a time correction. Needless to say, the performance of equity mutual funds suffered as well, as seen in the table below.

As can be seen in the table above, all equity mutual fund categories posted negative returns between October 19, 2021 and May 20, 2022. When the performance of these categories is compared to that of Nifty 500 Total Returns Index (TRI), about 40 per cent have underperformed the Nifty 500 TRI. However, 60 per cent of the equity mutual fund categories have outperformed Nifty 500 TRI.

Diese Geschichte stammt aus der June 06, 2022-Ausgabe von Dalal Street Investment Journal.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

Diese Geschichte stammt aus der June 06, 2022-Ausgabe von Dalal Street Investment Journal.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

WEITERE ARTIKEL AUS DALAL STREET INVESTMENT JOURNALAlle anzeigen
How To Invest In An Ageing Bull Market
Dalal Street Investment Journal

How To Invest In An Ageing Bull Market

Bull rallies (periods when stock prices rise) and bear declines (periods when stock prices fall) are natural parts of stock market cycles, but they don't follow a fixed timeline.

time-read
5 Minuten  |
July 29, 2024
Should You Entrust All Your Money To A Single AMC?
Dalal Street Investment Journal

Should You Entrust All Your Money To A Single AMC?

If you are a market participant, you have probably heard the quote 'don't put all your eggs in one basket', which suggests diversification. Investors often focus on diversifying across categories like large-cap, mid-cap and small-cap, but they may unintentionally overlook diversification across different AMCs. The question arises: is AMC-wise diversification really necessary? Rakesh Deshmukh takes a closer look at this scenario

time-read
7 Minuten  |
July 29, 2024
Wild Swings Engulf Global Equities
Dalal Street Investment Journal

Wild Swings Engulf Global Equities

U.S. stock markets experienced significant volatility. An early-week rally pushed the markets to new highs, but this momentum faded, primarily due to weaknesses in the tech sector. The major indices had a mixed finish with, S&P 500 and Nasdaq closed lower, while the Dow recorded a notable gain.

time-read
2 Minuten  |
July 29, 2024
U.S. Elections and China's Economy Hamper Commodities
Dalal Street Investment Journal

U.S. Elections and China's Economy Hamper Commodities

Commodity markets experienced selling pressure in the last fortnight, driven by uncertainties surrounding the upcoming U.S. presidential elections, concerns about the Chinese economy, and increased agricultural production in Brazil.

time-read
2 Minuten  |
July 29, 2024
Wealth Building For Retirement Through Mutual Funds
Dalal Street Investment Journal

Wealth Building For Retirement Through Mutual Funds

Retirement is one of the most crucial and lifechanging phases. It marks a period where maintaining your lifestyle becomes paramount even though your regular income stops.

time-read
3 Minuten  |
July 29, 2024
Mastering Investment with Information Ratio
Dalal Street Investment Journal

Mastering Investment with Information Ratio

Information Ratio helps in navigating the complexities of the investment landscape by assessing an active fund manager's performance. And though it has its limitations, it remains an essential part of the finance industry. The article explains what Information Ratio is and how investors can use it as another tool

time-read
6 Minuten  |
July 29, 2024
Plan To Be Financially Independent
Dalal Street Investment Journal

Plan To Be Financially Independent

Each of us aspires to be financially independent as it ensures having enough resources to be self-sufficient and control our finances.

time-read
2 Minuten  |
July 29, 2024
❝Technology is the new game-changer"
Dalal Street Investment Journal

❝Technology is the new game-changer"

With a new breed of young investors entering the financial markets, it is the use of technology that is increasingly playing a major role in how investments are done and tracked. Anand Radhakrishnan, Managing Director, Sundaram Mutual Fund, shares his opinion about how this factor is turning into a significant tool and how it will shape the strategies of his company

time-read
5 Minuten  |
July 29, 2024
What If Donald Trumps?
Dalal Street Investment Journal

What If Donald Trumps?

The potential election of Donald Trump as president in the U.S. carries significant implications for the Indian equity market. It could lead to changes in the global trade dynamics, in particular affecting the Indian IT sector while also raising inflation levels and leading to yet another revision in the visa programme for Indians who want to work in the US. The article takes a closer look at what may lie in store

time-read
6 Minuten  |
July 29, 2024
Sectoral Gains Make A Mark
Dalal Street Investment Journal

Sectoral Gains Make A Mark

Benchmark indices continued their uptrend, reaching new record highs, although the pace has slowed as the broader markets faced selling pressures

time-read
2 Minuten  |
July 29, 2024