Equity fund investors are in a critical situation. They are watching their schemes plunging into the negative category. If you look at sensex’s performance over the past one year, you will find that it is actually giving a negative return of around 13%. So it is natural that diversified equity schemes would also offer negative returns. But investors should not get nervous and try to exist those schemes. Give some time and you will find that they would recoup their losses as the market recovers.
These are many people who are not mentally prepared to accept the fact that he or she should wait and continue with the systematic investment plan with a scheme, which has been languishing in the negative territory for a long time. The person may even go ahead to even stop the SIP in the scheme. He or she may decide not to come back at least until the market improves. Well, according to me, this is a bad strategy. In my opinion, one shouldn’t change his or her investment strategy depending on the mood swings of the market. Once you have made an investment plan, you should stick to it without fail. For example: If you have taken the equity route to achieve a long-term goal, you better stick to it . If you abandon it halfway through because of a bear phase in the market, you would have to start all over again. Investors should not panic on the basis of the mood swings of the market. He or she should remain firm, looking ahead for the market to recover.