Aditya Birla Sun Life AMC Limited

5 Reasons Why You Should Be in A Long-term Commitment to Your Mutual Fund - ABSLMF Blog

Why you may not have commitment issues with your Mutual Funds

Mar 08, 2018
4 mins | Views 81

If there’s a wedding scene in a movie, you can almost bet on either the bride or the groom having second thoughts about the next step. Freaking out at a point like this is quite understandable since marriage is a big commitment, but then they overcome their fears and live happily ever after.

This also applies to your relationship with your investment. So, keep commitment issues at bay. Here are 5 reasons why you should be in a long-term relationship with your Mutual Fund.

Long-term relationships are like wine. They get sweeter with time.


The more time you spend together, the better you know each other. Like any other relationship, a mutual fund requires you to invest time too. The efforts put into nurturing both the relationships yield results only in the long term. You cannot decide whether the fruit from a tree is sweet or not before the tree grows to its full height.

Ups and downs are a part of it

Every couple has little problems. But, if you focused on the daily droll, your relationship may not go anywhere. The case with Mutual Funds is similar. Do not let the ups and downs of the stock market make you panic. Equity markets can change drastically every day. But, if you watch the yearly records, you may not notice much difference.

 “Do what you did in the beginning of your relationship and there won’t be an end.” - Anthony Robbins

When you began dating, there was a reason, a feeling behind that decision. You continued because you knew you were with the right partner. When you decided to invest in a Mutual Fund, you examined its past performance. You believed that the investment could give you good returns in future. Keep these reasons in mind and wait for some time before you call it quits.

Do not let uncertainty get the better of you

No one knows what the future holds. But try to make the best choices in present. Many external factors may affect your relationship as you move forward. But you carry on because you know what you are doing. In the same way, economic conditions, political, and social issues may affect the performance of the stock market. But companies continue their business, and grow too. Thus, your money also has the potential to grow along with the companies it has been invested in. Do not let the fear of uncertainty make you go back on your commitment.

But, the health of a relationship is also important

If things don’t get better after some time, you might consider moving on, right? In the same way, say, a Mutual Fund’s value only decreases over a period and doesn’t correct itself even after waiting for some time. Then you should think about redeeming those funds or reinvesting it somewhere else.

Thus, the Mutual Fund is one of the best (investment) partners you could have in the long term. Nurture it, care for it, and hold on to it to enjoy its benefits when you grow old.

Mutual fund investments are subject to market risks, read all scheme related documents carefully.

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