InvestorQ : Do I invest in mutual funds even though the markets are at an all-time high?
Isha Tharwani made post

Do I invest in mutual funds even though the markets are at an all-time high?

ananya Sing answered.
11 months ago

Mutual funds (MFs) are subject to some volatility and are not expected to be steady or give steady returns throughout the year. Financial markets, especially stock markets, tend to be very volatile, and there are phases where the markets hit an all-time high, and there are also phases where the markets slide. The reason a person invests in MFs is its ability to give inflation-beating returns.

However, to get higher returns, one must assume some amount of risk. MFs especially over the long run, help stabilize the ups and downs and aid wealth creation. MFs are investment instruments that can only be truly appreciated when you look at them from a long-term perspective. If you look at anything on a daily or monthly or even yearly basis, it is bound to be volatile.

Volatility is the nature of equity markets. Now coming to your question, I would suggest that you avoid trying to time the market as that will prove to be a futile exercise. Instead, begin a SIP in your choice of MF keeping a time horizon of at least 5-7 years.

Remember, when you go the SIP route, volatility becomes your friend because in volatile times you are able to buy more units. If you invest in MFs in a disciplined manner over a long investment period, especially through SIPs, then you can, most often than not, expect a sizable corpus at the end of your investment period.