Lok Sabha elections 2024: Will the results cast a shadow on your mutual fund portfolio?
InCred Wealth, emphasises the inevitable volatility around election results. He notes, "The market will be volatile, and we could see sharp moves on either side based on the election result outcome.
However, in the long term, markets mirror corporate earnings growth." This highlights a critical point for investors: while short-term market reactions can be unpredictable and sharp, long-term investment returns are more closely tied to the fundamental performance of the companies in which mutual funds invest.Kalwani advises investors to adopt a long-term perspective, ideally a three-year-plus investment horizon, particularly in equity mutual funds. This approach helps to mitigate the impact of short-term volatility and allows investors to benefit from the underlying growth in corporate earnings.
Given the current market conditions and premium valuations, he suggests that staggered investments can be a prudent strategy to average out purchase costs over time.Ankit Jain, Senior Fund Manager at Mirae Asset Investment Managers India, concurs with the long-term perspective. He states, “Stock market does react in the short term to election results but that should not have any impact on long term investments such as mutual funds.
Mutual funds invest in stocks based on their fundamentals and growth story, which will remain the same irrespective of the election result." This viewpoint underscores the importance of focusing on the fundamental strength of the businesses within the mutual fund portfolio rather than trying to time the market based on election outcomes.Jain further explains that the Indian economy is on a robust footing, supported by strong policy measures from the current regime. He believes that continuity in these
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