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Should I wait for a fall in the NAV to invest a lump-sum amount?

Dhirendra Kumar advises being systematic with your investments


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I am planning to make lump-sum investments in mutual funds. Till how much fall in the NAV should I wait for?
- Chandramoni

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I really don't have any advice for you. If you wait for a fall in NAV, you are likely to keep waiting, maybe forever. And suppose the market went up by 20-25 per cent, while you kept waiting for the market to fall, this would lead to unusual investing behaviour from your side.

So, it is better to devise a mechanism that irrespective of anything, you will invest around 10 per cent of your money on the last day of every month, even if there is no fall in NAV. Try and time the investment for your own satisfaction. However, just make sure that you invest 10-20 per cent of your money so that you are not left out of the market. Predicting these falls and waiting for them did not work out in the past and even many fund managers have not been able to do it.

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