MF buying update – The time is now

Over the last two months I have written enough blog posts advocating a different method of buying MF. Most people who have understood my message have agreed to the basic plan. However, even with a fairly robust method of looking at index levels and their DMA, many have wondered as to what will be the exact time of the first purchase. Giving a buy or a sell call in the markets is hazardous because you may so easily be proved wrong – yet, I will start buying MF this week for large caps.

Am I saying that I am convinced of the market not falling any further? Not at all – in fact I think that there is a good possibility of the markets getting to even lower levels than today by late January, if the quarterly results are once again not meeting the expectations. The important point is to note that in my method I will buy MF 4-6 times in a year. If I had some magic wand through which I would be able to predict the day when Nifty will be the lowest in 2016, I would buy my large cap MF units only on that day. In reality, despite studying fundamentals and market movements I do not know that date. So the question is this – if there are 4-6 different time instances where we should buy then is this one of those? 

Posing the question in this fashion will obviously have a positive answer. Why do I say so? Think of it like this – not too long back Nifty was at 8400 plus and it has come down by more than 10 % in less than 3 months. Also, today it very nearly tested the lowest point of 2015. Remember, it had found support at 7500 plus levels last time and today it demonstrated some strength starting just after the lowest point reached. While it may yet surprise us and go below 7500, I do not think that will be the case.

OK, enough of discussions on this now. I will do the following:-

  • Buy 20000 Rs worth Large cap, Diversified Equity and multi-cap funds this week after seeing the reaction to Fed rate hike.
  • Buy 20000 Rs worth of US International fund tomorrow as I think after the rate hike the US indices will rise further.
  • I will not buy mid cap and small cap funds now as I believe there is a lot of possibility of these indices hurtling downwards in the next 2-3 months or so.

What should you do? Well, you can always continue your SIP while watching the real buying opportunities slip away. Or you can put your next 3-4 months money now.

Your money your choice – be sure you are doing the right thing.

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8 thoughts on “MF buying update – The time is now

  1. Hi Himanshu,

    You can look at Motilal Oswal MOST Nasdaq 100 ETF, Its an ETF which invests in the Top 100 companies listed on the US Nasdaq. it has given more than 20% returns since inception as well and included Apple, Google, Facebook, Intel stocks too.

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  2. nice post , but the exchange rate fluctuation can take a toll on the US International fund if invested at this juncture .Correct me if i am wrong.

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  3. Mr Rajshekhar ,pl suggest international usa ? Fund and also level of mid cap fund we should aim. Pe of midcap is almost 25 . if so it is very high? Even nifty pe is higher unless earning increase Dec. End . thanks.

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