Though market has fallen steeply it is dangerous to invest fully or in one shot into Equity Mutual funds. Steadily increase exposure to Equity Mutual funds by way of Switching from Debt to Equity at different price levels.
Initially investors has to invest in a Debt fund and then transfer amount to designated Equity scheme whenever they see a fall in the price. Investors should note that all valid transfer requisitions from one scheme to other would be treated as Switch out / redemption and switch in / subscription transactions at the applicable NAVs of the two schemes will be reflected in the number of units allotted. Investors have to also look into eligibility of the schemes which will allow them to Switch from Debt to Equity. Please read the offer document of the transferee scheme carefully before investing.
By doing a manual switch when there is a fall in the price will give more advantage in averaging the price than the Systematic Investment Plan (SIP), Systematic Transfer Plan (STP) or Switch Plans. Manual Switch will allow investors to have control over the entry price in Equity schemes and as such will give the best of averaging the price.
In the current market condition it is better to rebalance the allocation systematically in favour of Equity. Investing in Debt and switching slowly to Equity will give best of times of both Debt & Equity.
