Those who have invested in equities through mutual funds, unit linked insurance plans and portfolio management services are wondering what to do next...
Here is a look at how mutual fund investors are faring, and why there are fears that there could be a panic sell-out.
Meet Pranav Kotlikar - …a 27-year old banker who had never looked at the stock markets till his friends began cashing in on the bull run of the last three years…
while Pranav did not byte the equity bullet totally, he began moving most of his monthly savings into mutual funds in 2006… the returns were spectacular, and Pranav felt on top of the world but six months into this year, Pranav is more than a little lost…
Pranav: "I stayed on after the market slide…I wish I had not done that.. I've lost almost Rs 2 lakh…"
Pranav is just one of the over four crore individuals who put their money in mutual funds trusting it to be a safe haven for their savings. And who could blame them? If you went to any bank branch or met any financial planner over the last two years, chances are you would have opted for one of the following as a sure shot way of saving for a happy and early retirement
Mutual funds, especially systematic investment plans
Unit linked insurance policies, childrens plans and pension plans
Portfolio management services
Until January this year, all of the above would have made you feel secure. Mutual funds gave returns of anywhere between 40-50%. Assets under management grew five-fold in just 3-4 years, and investor base grew by a staggering 57% in 2007…
Then things turned, and with the 30% slide in the markets, the picture is different....
Today, the NAVs of 80% equity funds have returned to their one-year lows. Diversified equity returns have shrunk into negative territory, and is now at a minus 8.2%.
Dhirendra Kumar of Value Reserach says: I am surprised there is no panic... Now, it will start as people start losing their capital..."
Here is a look at how mutual fund investors are faring, and why there are fears that there could be a panic sell-out.
Meet Pranav Kotlikar - …a 27-year old banker who had never looked at the stock markets till his friends began cashing in on the bull run of the last three years…
while Pranav did not byte the equity bullet totally, he began moving most of his monthly savings into mutual funds in 2006… the returns were spectacular, and Pranav felt on top of the world but six months into this year, Pranav is more than a little lost…
Pranav: "I stayed on after the market slide…I wish I had not done that.. I've lost almost Rs 2 lakh…"
Pranav is just one of the over four crore individuals who put their money in mutual funds trusting it to be a safe haven for their savings. And who could blame them? If you went to any bank branch or met any financial planner over the last two years, chances are you would have opted for one of the following as a sure shot way of saving for a happy and early retirement
Mutual funds, especially systematic investment plans
Unit linked insurance policies, childrens plans and pension plans
Portfolio management services
Until January this year, all of the above would have made you feel secure. Mutual funds gave returns of anywhere between 40-50%. Assets under management grew five-fold in just 3-4 years, and investor base grew by a staggering 57% in 2007…
Then things turned, and with the 30% slide in the markets, the picture is different....
Today, the NAVs of 80% equity funds have returned to their one-year lows. Diversified equity returns have shrunk into negative territory, and is now at a minus 8.2%.
Dhirendra Kumar of Value Reserach says: I am surprised there is no panic... Now, it will start as people start losing their capital..."
These are tough times, and those who have seen bull runs and slides still insist that there is nothing like patience. Systematic investments could ensure that people like Pranav cover money no matter which way the markets go…
http://www.utvi.com/stock-market/mutual-funds-news/5701/patience---only-way-for-mf-investors---.html
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