People talk about "Catching a falling knife" and how it is not advised in stock investments when the markets are volatile. Is this applicable for mutual fund purchases as well?
- Jagnish
No, it isn't true that it is not advised for stocks because great investments in stocks are made only when it is falling. It is not very different in case of mutual funds as well. There are two components to any market fall that we see, one, the general cyclicity of the market and its segments, in this case one must continue with its investment plan. Second component is the specific movements in one type of investment, which are difficult to catch and analyse. The only thing that an individual investor can do is to average their investments, stick to a plan and rebalance it.
This article was originally published on January 29, 2019.
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.
