While investing in Mutual Funds, you go through fund reviews, watch funds performance, track historical performance, find out what experts have to say and based on that decide if you wish to buy the fund. In short, buying a fund is no child’s play. It requires a lot of effort but you are willing to put the effort because you have expectations of performance attached to it. So when do you decide is the right time to sell a fund? Most investors sell a fund under these three circumstances:
The question still stands, is performance the only measuring tool for a fund? In the three circumstances stated above, the decision to sell a fund was solely made on the performance. Experts and advisors are of the opinion that most of the funds are redeemed and/or sold because of the performance. While this could be one of factors that affect the decision for selling. It may not be very wise to make this the only factor for selling.
Conclusion
‘When to Sell a Fund’ is a subjective question, best known to investors who are dealing with it. Our needs and financial goals keep changing, it is natural to sell funds and keep some to ensure that the ultimate aim, that is, the fulfillment of financial goals is met. It is always best to exercise caution and not rush while making a decision to buy and sell. The decision to sell always has to be in favour of profit making. If you redeem a fund due to short term market volatility or have to pay a heavy exit load on the entire amount being redeemed and not just the initial investments then you have to make a call regarding how favourable it is. It is always best to seek professional help of your financial advisors and let their expert opinion guide you in your investment journey.
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