Unfortunately, many retail investors in mutual funds, think short-term.
When markets peaked in January, gross inflows into equity schemes were at their highest, Rs 21,247 crore. As the markets started descending, gross inflows started dropping. In July, when the Sensex hit a low around 12,500 (almost 40% below the peak), gross flows were Rs 2,762 crore—a whopping 87% below the January highs. Worse, redemptions as a percentage of gross inflows (36%) were amongst the lowest at the market peak in January, and rose as high as 91% in July, with markets at the year’s low.
So what have mutual fund investors done?
They sold when the markets were low, and bought at the peak. This also entails additional cost because of entry and exit loads.
Household exposure to stock markets accounts for less than 7% of household investments. Of the few retail investors who are exposed to stock markets, many invest in the wrong way. Retail investors should focus on long-term objectives of wealth creation from stock markets.
I agree with you..Investors should focus on long-term objectives of wealth creation.Well i have invested my money in “Mutual Fund” and i am very happy with the returns and security i get from the compay.From the various type of funds, i selected ” Select Mid Cap” fund that has the potential to become the market leaders of tomorrow.
Regards,
Aaradhna