The world economy is going through so many changes. Do you think at this point investing in mutual funds is a wise decision?
You are right, the world economy is delicate and doubts about investing in mutual funds are only natural.
If I share my perspective, investing with a long-term horizon in mutual funds is always a good idea. However, I see many new investors mostly try to catch the market at the bottom and sell out at the peak.
It is nearly impossible to predict the market correctly at all times. What matters is your intent and your research. There is no correct answer for this question.
Timing the market rarely works and waiting for the perfect time usually leads to missed opportunities.
I personally focus on investing according to my personal goals rather than following the trend. Here is what I consider before investing:
- Financial Goals: I match mutual fund types to my goals. Equity funds for long-term wealth, debt funds for stable returns in the short term and hybrid funds for balance.
- Market Conditions: I do not fear volatility. In fact, I use SIPs to average out the cost over time.
- Risk Appetite: I pick funds based on how much risk I am comfortable with, not only depending on short-term returns.
- Fund Track Record: I check the consistency of returns, expense ratios and fund manager experience.
In short, it is less about when and more about how and why you invest. Mutual funds work best when you keep investing and let compounding do its job.
If you are financially secure, have clear goals and have an idea of where and how much to invest, it is a good time.