Kya Time Spent In Market For Mutual Fund Investing Sahi Hai?

There is a nice advertisement these days during the IPL over breaks and that is: In cricket timing sahi hai, but, in markets time spent in markets sahi hai. Timing is probably more crucial then time spent in the market. Let us look at the table below and explain from some of the biggest mutual fund schemes.

Name of the scheme	3-year returns	5-year returns	7-year returns
Axis Bluechip Fund	12.34%	12.36%	11.10%
Mirae Asset Large Cap	13.72%	11.10%	NA
SBI Bluechip fund	13.48%	9.66%	10.41%
HDFC Top 100	10.43	8.89%	NA
UTI Mastershare	14.4	10.68%	NA
Aditya Birla Frontline	12.48%	8.93%	9.68%

We have taken a few schemes. From these we realized that over the last 3 to 7 years, the best returns have been for investors, who have invested for shorter periods. The three year returns from some of the biggest schemes is better than the 5-year returns and in some cases the 5-year returns has been better than the 7-year returns. Having said that it is hard to time the markets, but, to say you would definitely get better returns in the long-term is a myth, that needs to be burst.

We believe that to some extent timing is also crucial like batting. Today, one can freely move money from equity mutual funds to debt mutual funds and so on. At 60,000 on the Sensex many brokerages and analysts were screaming that the Sensex is over valued. The 1-year returns from most schemes are now just 1 to 7% and if the markets fall further, the returns could equal that of fixed deposits. The best returns for investors on an annualized basis has neither come from long term of 5 and 7 years, nor from short term of 1-year. It has come somewhere in between at 3-years. Timing of your SIPs and investment also remains integral to investing. When the Sensex hits 60,000 points and 62,000, we have been telling readers to partially move money to debt. We are now telling investors to buy more into equity SIPs at Rs 52,700 on the Sensex.