5 Key Points to Consider While Choosing Equity Funds When Markets are High


Mutual fund investments have always been a center of attraction when it comes to investing in financial instruments. Always keep in mind that equity mutual funds are highly dependent on the rate of return the fund is providing along with a number of other factors.

Here are 5 key points to consider while investing in equity mutual funds when the markets are high:

Consider your profile

When investing in equity mutual funds make sure that you stick to your area of expertise. Just because a certain segment of the market is doing well you need not rush your investment with limited knowledge about the field. But First, It is better to seek advice from the best stock broker in India before investing in equity mutual funds. 

Consider fund management

Markets may be high all the time, it is of use only if one is able to skillfully use it to play the tide of the market and invest to their advantage. When selecting a mutual fund for investments, fund managers play a crucial role. Your fund manager should know when to book the profits in a high market. 

Gauging markets timing

For making returns in the markets, investors need to take timely, crucially timed trades at the right time. Investors usually are wary of the prices inevitably falling when the markets are doing well. Thus, the key to investing in equity mutual funds when the market is high is keeping a sharp focus on the fund performance and not getting swayed by the attempts to time the market.

Consider the fund’s past performance

It is difficult to differentiate between a well-performing fund and a well-performing market. If the market is performing well but a fund has a negative historic performance then it might not be the best equity mutual fund for you to invest in. It is always advisable for you to invest after comparing the performance of different funds.

Avoid emotion-based decisions

When the markets are high, most equity funds generate good returns. However, before choosing a mutual fund, it is important to remember that since the markets are volatile, the market highs may not last forever. Hence, one should not get swayed by the over-optimistic market sentiments and always consider a long-term view before choosing any equity mutual fund scheme. Avoid taking decisions based on emotions when the markets are high or extremely volatile. Before keeping these points, you can make a list of top 10 stock brokers in India and choose the one that meets your financial requirements.


What are mutual funds?

Mutual funds are open-ended professionally managed investment funds that pool in the money from many investors to purchase securities.

What are equity mutual funds?

An equity mutual fund is the one that invests principally in stocks. It can be actively or passively managed. Equity funds are also known as stock mutual funds and are principally categorized according to the company size, the style of investment holding, and geographically.

What are the benefits of equity mutual funds?

Some of the benefits of equity mutual funds are as follows:


  • They are professionally managed

  • The help in risk mitigation

  • They help in diversification

  • They have a small ticket size

  • They are well-regulated and tax-efficient

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