Like buying equity mutual fund units as market dips, what is the best time to invest in debt mutual funds?
You don't really need to time your investment in debt mutual funds. When investing in a debt mutual fund, you can even invest lump sum. Make sure that you choose the appropriate kind of fund depending on your time frame. Many investors invest in debt funds for the long term. Just ensure that your chosen fund is invested in securities that are safe enough.
But your first assumption that one should be buying equity funds on dips looks nice. But it isn't easy to implement. That's because you don't know whether this dip is the final one or will there be a dip further or it'll linger on.
So, I would say that most investors should implement some disciplined strategy. If you are investing X amount every month, maybe have some allocation for trying to target the dip because the biggest risk that comes with trying to look for that dip is that you will miss some of the big moves. And such moves happen when you least expect, i.e., the big declines and upward movements come as a surprise. People should note that the biggest gain we have seen in recent times was from the low of March 2020. And everybody was in awe of that big surge that happened. So, you will have the big declines coming for a brief period, and you will have the big surge that will happen. And that is when most investors waiting on the sidelines, waiting for that dip, actually miss out.