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Should I redeem my units as I think the market is going to fall before Diwali?

Should I redeem my units as I think the market is going to fall before Diwali?

I have invested in equity mutual funds through SIPs and a lump sum, which are all profitable right now. I fear the high rise of the markets and think it is going to fall before Diwali. Does it make sense to redeem all my units and book the profits?

Rahul Mishra, Bhopal

It is best to invest with a financial goal, so that you know how far away you are from it and the sum that you need for it. This way, you will stay away from temporary fluctuations of the markets and stay invested for the long term. Moreover, it appears that you are unable to distinguish between real and notional loss and gains. Till such time that you do not redeem your investments, the profit that you see is actually a notional gain. The same applies to losses. You should stay invested in equity mutual funds for the long run, however, if you are getting too restless, make a partial redemption to satisfy your concern and stay invested for the long run.

olmdesk@outlookindia.com

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