Should I exit from a fund showing negative returns?

It's a very complex question, as the answer depends on the kind of fund you have invested in. After seeing excellent returns in 2017, many investors invested in the market. But 2018 turned out to be very devastating for equity and even now, the market is not going anywhere. So, many people are getting disappointed. But when it comes to equity investments, a time framework of one and a half years is too short to decide on exiting the fund. Likewise in fixed-income funds, some funds suffered because of rating declines or poor credit. Many funds were marked down. But that money has not disappeared and is subject to some resolutions. So, don't get out of those funds in a hurry.

There can be another situation wherein one invested in a fund based on its recent performance but now it is not working out as expected. In such a case, you should take out your money and rethink about how you should invest the money and then, be methodical about your investments.

Generally, when investors make investments seeing a market like that of 2017, then they make lump-sum investments say five lakh and when that five lakh goes down by 10 per cent, it's quite unnerving because this money could be your two-month saving or your one-month salary. It is, therefore, important to have a calibrated plan and be methodical about it.

In fact, it is a kind of market where a regular investor should be feeling happy with the fall in the markets, as one gets to buy cheap. It takes five to seven years for people to understand how long-term investing works and how being regular with your investments helps. So, use this as an opportunity to work on a plan.

                          ANGEL BROKING