New investors in mutual funds may be tempted by higher valuations of the stock market, but they should prioritize hybrid funds at this time.
Experts believe that mutual fund investors can invest in multi-asset funds that invest in equity, debt and gold.
In the recent boom, as soon as the Sensex crosses 50 thousand, many investors who have invested in mutual funds for the first time feel that they should now bet more in equity. But mutual fund experts believe that hybrid funds will prove to be the best for new mutual fund investors. Hybrid funds invest in every asset class.
Investment in multi asset funds reduces risk
Experts believe that mutual fund investors can invest in multi-asset funds that invest in equity, debt and gold. The reason for this is that experts say that due to the rapid rise of the stock market in recent times, equity valuation is no longer cheap.
While the interest rates are also at the lowest rate. Although high valuation does not mean that the market will fall in the near future, but the risk has increased. Therefore, to cover the risk, new investors should focus on investing in hybrid funds.
Date and gold hedging is also necessary
If the stock market continues to grow, then investors will continue to benefit from high valuations, so investing in mixed asset class will give investors the benefit of equity appreciation. Also, due to having mix asset class, the risk will also be reduced. Therefore, investors should invest in such funds which also include debt and gold for hedging.
Resort to portfolio balancing
According to a report by HDFC Mutual Fund, since 1999, equity has been the best performing asset class for 23 consecutive years, while debt has been the top asset class for the last five years and gold for six years. Experts believe that investors who are very active in equities should also think about re-balancing their portfolio in six months.
Nidhi Malviya is fun loving girl. She writes at NoobFeeds about various topics related to Finance, Technology, Business etc.