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ElectionResults2019: should mutual fund investors alter their investment strategy?

As the Modi-led NDA-2 is set to form the next government at the centre, the stock market has surpassed 40,000 today.

, ET Online|
May 23, 2019, 12.58 PM IST
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Even as the Modi-led NDA-2 is set to form the next government at the centre, the stock market has surpassed 40,000 today. The euphoria is likely to spread across the market and even mutual fund investors might be swept off their feet in the coming weeks. That's why we asked some mutual fund managers for their advice to investors.

“I think the euphoria in the market is because the market loves stability. A clear mandate to the existing government means everything goes on smoothly. We have seen markets reacting to the hints of NDA coming back after the exit polls. However, this sharp rally won't continue for a long time. Ultimately you have to focus on the earnings growth and economic macros,” says G Pradeep Kumar, CEO, Union AMC.

Rajat Jain, CIO-Equities, Principal Mutual Fund, agrees: “This rally can be attributed to the hope for a stable government. Even though markets had factored in most of it after the exit polls, the high numbers early in the day have pushed the indices up. However, after the results I expect the rally to be sideways and not this sharp."

Jain believes the government will have to look at the concerns of the market to sustain the good show. "GST collections needs to be tightened, economic slowdown has to be looked at, macros, earnings... all of these together will sustain the market,” says Rajat Jain, CIO-equities, Principal Mutual Fund.

Mutual fund advisors say investors should not get influenced by he optimism all around and become adventurous.

“I want to tell investors to not get carried away by the current rally in the market. Don’t decide to invest because the markets are going up at this point. Take long-term positions, especially in mutual funds. Don’t let these temporary phases decide your strategy,” says Rajat Jain.

Pradeep Kumar says mutual fund investors should stick to their investment strategies. "It is too early to judge which sectors will do well in the long-term. It will depend on the government’s policies and budget. So, sit back and stay with your asset allocation,” says G Pradeep Kumar
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