The right time to buy a Mutual Fund is when the Market is down and the right mutual fund to buy is the one which has AUM less than 10,000 CR, allowing the fund manager to choose from wide variety of stocks in making a diversified portfolio.
Back in college days, I used to think Finance and Marketing are separate fields. But now I started seeing them go side by side. I think the the very idea of doing Monthly SIPs has been launched and marketed by Fund Managers so that they face a hassle free investing journey. And not just that, investors had accustomed to saving monthly by doing FDs and RDs, and Mutual Fund houses have no option but put the investors into discipline by launching innovative products.
Mutual Funds are not like FDs or RDs that if you invest regularly it will compound at a regular pace and give an abnormal return after any fixed period, it won’t even guarantee that there will a positive return. Hence experts advice to invest for long term. Actually compounding is also misnomer for Mutual Fund Returns because anything can happen in future and your returns are not guaranteed, which is actually mentioned in the document you sign. But still the slogan says “Mutual Fund Sahi Hai”.
But what is true is, the growth and absolute return of Stocks (and Mutual Funds, which dependent on Stocks). The past data validates it. And the CAGR stands at around 14%. If you take an optimistic view it might even perform better going forward.