Don't follow the herd: Make buy-sell decisions based on asset allocation

Those who have goals coming up in the near term should book profits in equity MFs

The Association of Mutual Funds in India’s monthly data on mutual fund (MF) flows held an element of surprise. Equity MFs witnessed outflows worth Rs 2,480 crore in July — the highest in seven years. Shorter-duration funds, on the other hand, received money. Investors also gravitated towards fund-of-funds of international schemes and gold exchange-traded funds (ETFs).

These numbers represent the aggregate decisions of all the investors in the market. But instead of following the herd, investors should make buy-sell decisions. After the steep fall in March, the bounce-back in equities has been sharp. Many new investors, rattled by high volatility, may