Stop Checking Mutual Funds Every Day: Here’s Why Niren Should Relax and Think Long-Term

Niren Sharma, an investor in mutual funds, checks the daily NAVs (Net Asset Values) and financial websites to see how his investments are doing. Every time the NAV drops, he becomes anxious. He is concerned that his investments aren’t performing as expected and isn’t sure what to do.

Niren needs to realize that tracking mutual fund performance daily is not helpful, especially for equity funds. The performance of these funds should be measured over longer periods, like three years or more, to avoid stress from short-term market fluctuations. Mutual fund returns published in factsheets follow SEBI guidelines and are shown for standard periods, such as one year or three years. These figures might not match Niren’s actual returns, especially if he invested at different times or added more money later.

To truly evaluate his investments, Niren should compare his fund’s performance with similar funds in the same category. If his fund consistently performs worse than its peers or the benchmark index, it might be time to reconsider his investment. However, if the fund is doing well compared to others, staying invested will likely yield better results in the long run.

In summary, Niren should focus on evaluating the fund’s overall performance, not obsess over daily changes.