Why to invest in Small and Mid cap Funds now?
In the last 1 year Mid and small cap have seen a sharp correction and pull back.
Does the correction in the broader market provide an opportunity to invest in mid- and small-cap funds? That’s a question on everyone’s mind right now. But with the economy slowing down and growth projections being lowered, is it too early to start looking at small caps?
In terms of valuation, a lot of the froth has gone away in small caps as compared to large caps,
“While everything is not cheap, it’s starting to look attractive.” Investors needs to have a long-term investment horizon, typically more than five years, when investing in small cap funds, “Before making any allocation to small caps, one needs to understand that this is an inherently volatile asset class, and based on their risk-taking ability and goal, invest in these funds.”
Take a look at this statistics to understand the returns when the markets hit low on Mid and Small cap space.
Always, i advise investors to have very long-term horizon for small caps because inherently it is a very volatile asset class and it takes time for small cap companies to scale up, grow and show great results and create wealth for investors.
You can manage this risk of further slowdown by deferring your investments through SIP or STP’s . They are putting some milestone and investors have to have five years-plus time horizon to make a decent return in small cap space and it is not a two-three year story.
So – Do not wait, call me now at 9841058689 to discuss your investment options.
Disclaimer. Mutual Fund investments are subject to market risks, read all scheme related documents carefully or colsult your Wealth Consultant.
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