With the unpredictably typical highs and lows of the stock exchange, investors today are highly doubtful of the feasibility of mutual funds. Gone are the days when mutual funds were viewed as a profitable platform for multiplying returns over a short period of time. Investors now believe in treating mutual funds with utmost caution and care, gathering more information on the procedure of exiting a mutual fund, rather than investing in it, since they realize that, any wrong judgment can prompt them to buy debts like a home loan, personal loan etc to match their financial requirement; possible on the eventuality of a market crash. This has allayed major fears in mutual fund houses, as this may reflect a downfall of fund investments over the next quarterly term. However, this anxiety may be natural and solely based on the human instinct of investing in funds, only to calculate the best time appropriate for redemption of funds. If this is a question that has been gnawing you too, then the answer is exactly the opposite of your investment policy. We invest in mutual funds when we have an availability of funds to buy them. So, instead of devising an algorithm to arrive at the best time to redeem your mutual fund, sit back and relax. The most viable time to redeem your mutual funds is when you don’t have any money!
Also, the best way by which you can take advantage of your mutual fund maturity is to initially, formulate a plan as to when you might require them. It is very important for you as an investor, to create a portfolio that is goal linked. Doing so, there are a lot of benefits that you can acquire. Firstly, if your fund account reaches the limit where, you think it can satisfy the particular financial requirement for which you started investing, you can stop the fund. Secondly, you will have a reason to set aside funds for other purposes thereby not making you invest more than or less than what is required. This helps in multi investing procedure, whereby, if you are lucky enough, you will be in a situation where you can complete your responsibilities simultaneously after a certain period of time.
Although this may seem like impractical advice to an amateur investor, it is a golden rule in the books of many. There is no point in fretting over the behavior of the market. It is a highly volatile and unpredictable platform that cannot be timed, no matter how hard you try to the best of your abilities. If you have been investing in equity funds, then continue investing over a long course of time, in a steady manner. Do not look for opportunities to redeem your fund at the earliest possible time. This may seem like hurried judgment after a period of time. Many investors are not able to judge when an investment has gone from being profitable to just dormant, offering no proper reason for the investment to hold on the fund. Yet again, the answer is easy as pie, offering an uncomplicated explanation to the investor. When investing into a fund, you may chosen between an aggressive fund, to achieve the highest possible returns regardless of the risks involved, and conservative funds, for a safer option with higher returns. In order to understand if your chances of exiting a mutual fund are feasible, analyze the category of your mutual fund to see if it is still profitable and justifiable in the market. If not, then redeem your investments and shift to a fund that offers better returns in the market. Redemption of is thus, an uncomplicated procedure for which one need not wrack his brains hard. All you have to do is assess your monetary needs and make a thoughtful decision based on it.