Nifty, Sensex at an all-time high! Should mutual fund and SIP investors book profits?

The stock markets reached unprecedented levels today, with the 30-share BSE Sensex surging by 301 points or 0.49 per cent to reach a new all-time high of 63,716 in early trade. Simultaneously, the NSE Nifty climbed 91 points or 0.48 per cent, reaching its lifetime peak of 18,908. Both mid-cap and small-cap shares displayed positive momentum, with Nifty Midcap 100 rising by 0.43 per cent and small-cap stocks experiencing a 0.70 per cent increase.

Considering the current rally, some mutual fund and Systematic Investment Plan (SIP) investors might contemplate cashing in their profits. However, for long-term investors, there is no need to be overly concerned about market fluctuations. The purpose of SIPs is to navigate market volatility effectively. By consistently investing a fixed amount at regular intervals, investors can mitigate the impact of price fluctuations and achieve a favourable average buying cost over the long run. It is advisable to remain focused on long-term investment goals rather than being swayed by short-term market movements.

“I don’t think as an investor you should try and time the market. Always have a goal in mind for your investments and closer to the goal, exit so that you can use the investments for the goal. I will not suggest that retail investors stop SIPs or exit investments assuming the markets are at life highs and will not go up further. Even if the markets go down, timing the entry again is difficult and investors typically miss the bus and hence should stay invested,” says Kirtan A Shah, Co-Founder & CEO, Financial Planning Academy.

Vishal Dhawan Founder and CEO Plan Ahead Weath Advisors said, "Investors need to ideally make this decision on the basis of their strategic asset allocation - if they have become overweight in equities as a result of the upward movement in equities, they can consider rebalancing by selling equity in their portfolio such that they come back to their original strategic asset allocation. However, if that is not the case and they are still underweight equity, they should continue with their investments, unless they have short term requirements of monies."

Mutual funds serve as excellent saving tools for long-term objectives such as funding a child’s education or planning for retirement. It is crucial to align these investments with specific goals and not allow market fluctuations to sway your decisions. However, if you have any immediate financial requirements or a goal that is approaching within the next six months, the current upward trend in the market presents a favourable opportunity to realise gains.

“With Nifty at all-time highs, it’s a good time to relook at portfolios and see if there's any changes to be done. If you need money for any goals in the next 6 months, it's a good time to exit and set those funds aside. However, if your goal is for another 3 years+ stay invested and continue to invest,” says Shweta Jain, Founder of Investography.