Mutual Funds:: Is it a good time to buy now?

Question

I have a couple of SIPs of some top rated funds(ref. Value Research Online). But currently when I check at my ICICI Direct account, all are going through huge negative returns. Will it be a good option to invest some extra on those funds assuming that future rise in NAV will give me good returns ? Please suggest as I have very less knowledge about the market.

Answer 1

Buy Fidelity Midcap, last years return rate was 19.02%

Answer 2

Playing the market in any investment tool is a crap shoot. Before I invested recently I did a ton of research and made my selections. DO NOT make your choice soley on past return percentage, look at the multiple year history and how long the manager has been leading the fund as well as fees, and redemtion factors and taxes. I purchased after the first of the year to avoid the end of year capital gains payouts. I watched the market values (NAV) each day and when I thought it had bottomed out, I bought. Well the old tale that no matter when you buy what ever you buy is guaranteed to go down is true. I lost money for about 3 or 4 days. Then slowly it worked its way back up. What is frustrating, is I was up about $2000 in almost 2 months. Then this bump in the Asian market happened at the end of February, the whole darn market paniced for no reason, which is very common, and I lost $3000 in 2 days. Things started to creep back up during March and I'm ahead again $1200 the other day but was down by $300 yesterday. Its maddening!! I've been told a hundred times, sit tight and leave it ride it will all work out in the end. Just wait until you think the NAV has bottomed out then make your buy. If it goes down a little, just sit tight it will eventually go up unless you chose your fund poorly. Spread your money around into diffeent types of funds from different entities too. Small Cap, Large Growth, Mid Blend. Stay away from the index funds they are not recommened, but I don't see where the other types are not affected more or less by the index anyway any more than the index funds. Also put some scratch into a foreign stock fund, thats been the only one thats held its value the best. The only time it went down was when the Asian market bumped.

Fideltity is OK, but watch for the fees!! That 19% could end up being a 8% return after fees and taxes! Do your homework and look at all the funds, Wells Fargo, Fidelity, Vanguard, Wellington..... etc.