Five Things to Keep In Mind If You Want to Exit From Your Mutual Fund Investments

A long-term patience is required if you are investing in Mutual Funds. However, thinking about when to exit is as difficult as choosing the right fund to invest in. A planned strategy and the right time are necessary when existing any MF investment. Strategy must be made after matching your investments with financial goals, ensuring maximum returns. Below are listed five essential things a person should keep in mind when leaving a mutual fund investment.

Achieving Financial Goals

• If your mutual fund investment has reached the value that meets your financial needs, such as purchasing a house, education investment, retirement or health care, then it is the right time to withdraw the fund and use it at the right place.

Regular Underperformance

• If your mutual fund value remains behind its benchmark for a long period, then it is the right time to exit from the fund and switch to a better-performing fund. However, this is a huge decision to take. Before leaving and moving to some other alternative, individuals must first compare its performance over a long time period instead of choosing it on the basis of short-term ups and downs.

Portfolio rebalancing

• Market conditions can change over time, affecting your asset allocation. Regularly reviewing your portfolio helps you decide if you need to decrease or increase investments in certain areas so you can stay on track with your risk level and financial goals.

Fund Manager or Strategy Variations

• A frequent change in the team of fund management or investment planning can affect its performance. If variations are noticed in the original objective of the fund, it might be a good idea to rethink your investment.

Alteration in Personal Financial Situation

• Life events like losing your job, higher expenses, or changes in your financial goals might require you to sell your mutual fund investments to get cash.