Is this the right time to invest in mutual funds? Ajay Bagga explains why you shouldn't be bothered by this question

The benchmark BSE Sensex rallied over 400 points in early trade Friday and the broader NSE Nifty spurted 54.15 points, or 0.46 per cent, to 11,711.20, a day after Prime Minister Narendra Modi-led BJP got an absolute majority in the Lok Sabha elections, giving a massive opportunity to investors to park their money and register good gains over the coming years. A stable government hints that the markets are set to perform well in the coming days and investors could make good returns from their equity investments. Yet, a question that could bother many is - Is this the right time to invest in mutual funds?

Well, the question should not at all bother you as investments in mutual funds can be done anytime. The process itself is simple as investors ca opt for mutual fund Systematic Investment Plans or SIPs, which reduces risk and saves them from the pain of timing the market. The monthly investments made through this route helps the investors deal with market volatility. 

Market expert Ajay Bagga told Zee Business TV, "Investors should take the SIP route. In this case, there is absolutely no need to time the market. The 2.5 crore Indians that are doing SIP every month, are the ones that made the money. They keep investing their money irrespective of the fact whether FIIs sell or buy. These are the investors that have gained the most over the last two years - especially the ones who invested more in small caps and mid caps."

Watch Ajay Bagga's views here -

#BazaarKiBaat | #MutualFund में SIP के जरिए बाजार में निवेश करना चाहिए: अजय बग्गा, मार्केट एक्सपर्ट#NoteSabha #ModiReturns #Sarkar2 @AnilSinghviZEE @Ajay_Bagga pic.twitter.com/UhEnO9SxUD

— Zee Business (@ZeeBusiness) May 24, 2019

Bagga advised investors to focus more on small cap and mid cap funds as they given the best returns over the last two years and have higher potential. "Whenever there is a turnaround of the economy, the small cap and mid caps do well. We see their index double in five years. This is where investors should park their money," he said.

The investor wealth zoomed Rs 2.87 lakh crore in morning trade on Thursday led by a rally in the equity market where the BSE benchmark Sensex hit 40,000-mark for the first time ever. Following the jump in stocks, the market capitalisation of BSE listed companies rose sharply by Rs 2,87,028.8 crore to Rs 1,53,56,153.14 crore in early trade from Rs 1,50,69,124.34 crore on Wednesday.

In fact, the stock market wealth has grown by Rs 75.25 lakh crore in five years since Narendra Modi-led NDA emerged victorious in the Lok Sabha polls in 2014, with benchmark Sensex gaining 61 per cent during this time. An analysis of the stock market movements from May 16, 2014 till date showed that the 30-share BSE Sensex jumped 14,689.65 points or 60.89 per cent. The index hit an all-time high of 40,124.96 points in morning trade on Thursday, as Modi-led NDA got a thumping majority in the general elections.