A horizon of 10-12 years can balance the risk of investing in the current period of high valuations. There a few questions that need to be answered, though. What kind of market cap you want to invest in, do you have idea about the current sectors that are in vogue, do you want to buy value or growth, generally speaking, and how do you see the future growth of the market w.r.t to the inflows through mutual funds and economic situation etc. My point is that, what kind of a fall are you expecting after you buy, and how would you react to that fall and are you prepared to take the necessary action, if a big fall happens.
Markets can still go up for another year or two, or can fall for any reason before this calendar year. Mutual funds while not as risky as direct stocks, cannot escape the time correction, and it could be disappointing and frustrating to see the same NAV for many months or quarters. And if the allocated amount is large, as is your case, you may have to bear the opportunity cost.
Having time helps, but volatility can consume time and give a return we did not expect.
| Subscribe To Our Free Newsletter |
