What Should Investors In Mid-Cap Funds Do Now?

The stock market has been volatile in the recent past and investors in the mid-cap mutual funds have witnessed a fall in the fund value.

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Some of the new investors in this category are even staring at a notional erosion of the amount invested in them. However, the investors need not worry about such ups and down of the market. The average return over a longer time frame of 5 or 10 years is still posting better returns for mid-cap funds. Equity investors need to be aware of the fundamental working of the markets. The stock market is not a one-way street and the share price of stocks listed on the stock exchanges do not move only in any one direction or in a predictable manner. Markets are volatile in nature and that is how they are supposed to be – uncertain and unpredictable.

Several factors including those which are internal to the company and even the external economic environment can play a role in determining the performance of the stock prices. Budget 2019 proposals on long term capital gains tax could be only one of the factor. Credit availability seems to be looking difficult as NBFC are struggling to get adequate financial support from banks thus impacting auto sales and other related economic activities. The recent announcement by the Finance Minster to cut the corporate tax will eventually lead to growth in the years to come.