Mutual Fund Executives Advise Investors to Maintain Long-Term Commitment Amid Market Volatility

Retail Investors Urged to Focus on Discipline and Patience

At the recent Groww's India Investor Festival, a panel discussion featuring top mutual fund CEOs emphasized the importance of discipline and patience for retail investors using Systematic Investment Plans (SIPs). Nilesh Shah of Kotak AMC, Navneet Munot of HDFC AMC, and Kalpen Parekh of DSP Mutual Fund stressed that staying invested through market cycles is crucial, rather than reacting to short-term market movements.

The panel highlighted that SIPs have become a staple of retail investing behavior, with Navneet Munot noting that the term is now used beyond investing, across areas such as gold, real estate, and even spirituality. However, the core idea of SIPs remains unchanged: to stay invested patiently. Munot added that investors who remain consistent through SIPs tend to develop three qualities - they are systematic, intelligent, and patient.

According to Munot, the biggest challenge for investors is not starting SIPs but continuing them through cycles. Many investors fail to fully benefit from compounding because they stop midway. He cited a Rs 10,000 monthly SIP in HDFC Flexi Cap as an example, where a total investment of around Rs 40 lakh over 31 years could potentially grow to Rs 18–20 crore over time.

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Nilesh Shah of Kotak AMC emphasized that SIPs should be seen only as a starting point rather than a complete investment strategy. He stressed the importance of combining multiple approaches such as diversification, asset allocation, lump-sum investing, and SIP top-ups. Shah also cautioned against trying to predict short-term market movements, citing uncertainty as a constant feature of markets across various cycles.

Kalpen Parekh of DSP Mutual Fund shared his experience during the 2008-09 financial crisis, where he moved money from equities into debt after seeing weaker equity returns. However, he later realized that this was a case of recency bias and backward-looking analysis. Parekh emphasized the importance of long-term perspective and not reacting to recent performance.

The panel also discussed portfolio construction, with Nilesh Shah warning against overexposure to thematic and sectoral funds after recent rallies in defense, PSU, and precious metals. Shah suggested a gradual investing approach of beginning with multi-asset or hybrid funds, diversified equity such as large-, mid-, and small-cap funds, and only then considering thematic or sectoral allocations.

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