Transcript: Don't do that. It's a knee-jerk reaction based on your perception. The market can continue to go up, even after you have taken out your money. Arbitrage funds are nothing but liquid funds with the only advantage of being treated as equity funds in terms of tax treatment. These funds are able to generate modest returns of up to 6.5%.
This kind of move can actually drive you out of the market. And once the market goes up by 10-15%, you will not be able to come back again. Exactly, for this reason, one should start with asset allocation. Decide on how much weightage you want to give to equity and debt. Over a period of time, the market will swing in both directions. Having an asset allocation policy in place will make sure that you buy cheap and get out when things get expensive. But, most importantly, you are never out of the market completely. Otherwise, this could translate into a huge disappointment. There is a small possibility of earning a big bonanza but the risk may not be worth it, particularly if it is your long term money.
This article was originally published on May 09, 2017.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
