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When should I change mutual fund schemes?
Dhirendra Kumar advises about situations in which one should consider shuffling between mutual fund schemes
29-Dec-2021
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Would you suggest shuffling between mutual fund schemes? When is it advisable?
- Sukhdev Bhatia
You should be shuffling mutual funds for two reasons. The first is when your goals change, or they have been achieved. For instance, if you had been investing for the long term, such as your retirement or upgrading your car, and you have accumulated that corpus, then take out your money. Also, if you have accumulated the amount needed for your goal before the stipulated time, you should take out your money.
The other reason to shuffle or redeem your funds is when you have invested in a fund for certain reasons, and those reasons disappear, you should sell your investments. For instance, a change in fund manager may not be the fundamental reason you redeem your investments but could be a reason when you should be alerted. If the fund that was earlier delivering superior performance stops performing under the new fund manager, you should consider switching to another fund. Similarly, if the fund had been doing well consistently and that was why you bought it in the first place, and now if it has stopped doing well, you should consider exiting the same.
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