Why are my mutual funds going down?

I have been investing in mutual funds since April 2021.

Parag Parikh Flexi Cap fund : Rs 10,000
Tax saver funds (bundle SIP): Rs 5,000:
Axis Long Term Equity Fund

Long Term Equity Fund
DSP Tax Saver Fund
Kotak Tax Saver Fund

It was going good for the first few months and suddenly from the last six months everything is going down:
Parag Parikh Flexi Cap Fund is down 34%
Axis Long Term Equity Fund is down 24%
ICICI Prudential Long Term Equity Fund is down 10%
DSP Tax Saver Fund is down 11%
Kotak Tax Saver Fund is down 10%

Please let me know what is the possible reason for this downward movement and what can I do to correct this?

-Ranjet Singh

You are investing in equity mutual funds that invest in the stock market. As you may know, the stock market is going through a rough patch – inflation, rate hikes, foreigners selling Indian equity…many factors are influencing the negative sentiment in the market. Now, can you do something about it? Well, you can’t do much about it. When the entire stock market is affected, even your equity mutual funds will be impacted. You can first check whether you are investing in the right schemes. For example, Parag Parikh Flexi Cap Fund and tax saving schemes are flexi cap funds that invest across market capitalizations and sectors. Flexi cap schemes are recommended to moderate investors to achieve their long-term goals. If you have a moderate risk profile and an investment horizon of seven years, you may continue with your investments. Most tax saving schemes also follow flexi cap strategy. Continue with your investments if they match your investment objective. If they are not in with your profile, you should revisit your investments.

Don’t stop your investments in equity mutual funds in a bad market phase. You may lose an opportunity to maximize your wealth. If you don’t have the basic understanding of investing in mutual funds, seek help of a reliable mutual fund advisor.


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