iStockI invest Rs 8,000 per month in ELSS: Axis Long Term Equity Fund, Aditya Birla Sun Life Tax Relief 96 Fund, and Mirae Asset Tax Saver Fund. Given the current market situation, is it advisable to continue investing in these schemes or shall I stop or change my investments? My plan is to invest for a long term, say, at least five years.
-Aditya Sinha
Do not link your investments to the prevailing scenario in the stock market. You should always choose your investments based on your goals, investment horizon, and risk profile. Always remember that you are choosing an equity mutual fund scheme because you have a long investment horizon and high risk appetite. We do not think five years count as long term any more. In the current situation, you should always an investment horizon of at least five to seven years if you want to invest in equity mutual funds.
It is not clear how long you have been investing in these tax saving mutual fund schemes. Anyway, you can analyse the situation yourself. You had no problem investing in stocks when the stock market was near its historical peak. However, you are having second thoughts about investing in stocks after it crashed 30% a month ago. Shouldn't it be the other way? In fact, the whole idea behind investing in equity mutual funds through SIP is to continue with the investments in a bad market and accumulate more units to maximise profits.
If you have a long investment horizon of at least seven years and the necessary risk appetite, you may continue with your investments in ELSS mutual funds. If you do not have the necessary risk appetite and investment horizon, you should stop your investments in equity mutual funds, including tax saving mutual fund schemes.
-Aditya Sinha
Do not link your investments to the prevailing scenario in the stock market. You should always choose your investments based on your goals, investment horizon, and risk profile. Always remember that you are choosing an equity mutual fund scheme because you have a long investment horizon and high risk appetite. We do not think five years count as long term any more. In the current situation, you should always an investment horizon of at least five to seven years if you want to invest in equity mutual funds.
It is not clear how long you have been investing in these tax saving mutual fund schemes. Anyway, you can analyse the situation yourself. You had no problem investing in stocks when the stock market was near its historical peak. However, you are having second thoughts about investing in stocks after it crashed 30% a month ago. Shouldn't it be the other way? In fact, the whole idea behind investing in equity mutual funds through SIP is to continue with the investments in a bad market and accumulate more units to maximise profits.
If you have a long investment horizon of at least seven years and the necessary risk appetite, you may continue with your investments in ELSS mutual funds. If you do not have the necessary risk appetite and investment horizon, you should stop your investments in equity mutual funds, including tax saving mutual fund schemes.
(If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)
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