Mutual funds seem to prefer debt over equities - Chart Of The Day 8 July 2013 - Equitymaster

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Mutual funds seem to prefer debt over equities
Jul 8, 2013

The Indian equity markets have been on a roller coaster ride since the beginning of this year. The foreign institutional investors (FIIs) have been blamed for a large part of this volatility. But it is interesting to note that the mutual funds have not been big fans of equity either. In fact they have been selling equities till May this year. At the same time, their investments in debt have been soaring., This may make one wonder if it is indeed time to follow the lead of the funds and move out of stocks as investments. But we feel that this would be a myopic and in fact a wrong way to look at stocks. Fund buying and selling is nothing but short term events. This leads to over exuberance as well as over pessimism in the markets. Such events should be treated as opportunities to buy the fundamentally strong stocks at cheaper valuations. Because eventually the short term blips will smoothen out and stock prices will reflect the underlying fundamentals

Source: Financial Express

This Chart Of The Day was published in The 5 Minute WrapUp - This is your biggest enemy while investing

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