Is it wise to invest in mutual funds now?

Is it advisable to invest in mutual funds when the market is down? I am investing in SBI Long Term Equity Fund and HDFC Tax Saver Fund since one and half years.
–Mohinder Singh

It is not possible to predict the future course of the market. At best, we can make some guesses with the facts and figures available. However, we can always go wrong. This is why it is advisable to invest in equity only you have a long investment horizon and the capacity to tolerate volatility. A long investment horizon will help you to go through different market cycles and make good returns.

You seem to be a new mutual fund investor. You are investing in two tax saving mutual funds or equity linked savings schemes (ELSS). These schemes help you to save taxes under Section 80C. They come with a mandatory lock-in period of three years. That means you can sell them only after three years. Note, if you are investing through an SIP, every monthly investment should complete three years. However, there is no need to sell ELSS investments soon after the mandatory lock-in period is over. As long as the scheme is doing well, you can continue with your investments.

It is not clear why you have selected these two schemes. SBI Long Term Equity Fund is an average scheme, and HDFC Tax Saver Fund has started doing well only in the last one year. Next financial year, you can invest in a better performer from the ELSS category.

Here are our recommended schemes from the category-
Best ELSS to invest in 2022

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