InvestorQ : Can we invest mutual gains again even though the market is down?
Akansha Shivdasani made post

Can we invest mutual gains again even though the market is down?

Answer
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Sadaf Khan answered.
2 weeks ago


Buying when the market has fallen and selling when it is a high is called “timing the market”. This is a difficult concept to practically follow and is not really fruitful in the long run. What one needs to understand is that stock markets are always going to be volatile. Mutual funds (MFs), especially over the long run, help stabilize the ups and downs, and aid wealth creation. 

If you invest in MFs in a disciplined manner over a long investment period, especially through SIPs, then you can, most often than not, expect a sizable corpus at the end of your investment period. SIPs in MFs tend to rationalize the market volatility to give you consistent returns.

If you regularly invest in SIPs, when the market is high, you will receive lesser units, and more units when the market is low, thus leading to averaging of costs. So good sense will tell you that investing consistently in MFs is more important than timing the same.  So, good sense will tell you that investing in MFs is more important than timing the same.