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Is it the right time to shift money from liquid to equity mutual funds?

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Last Updated: Mar 26, 2020, 04.01 PM IST
Is it good time to switch the money I have in liquid funds to equity funds like large cap, multi cap, hybrid... Or should wait for a few more days?
-Bhushan Dewan

You have not mentioned crucial details like your goals, investment horizon, risk profile, how much money you have in liquid funds, etc. Without these details, it is not possible to offer a comprehensive answer.

As said earlier, you have not mentioned whether you have parked the money in a liquid scheme to transfer it to equity mutual funds at a later date. If so, you may transfer the money in a staggered manner. You may transfer the money daily, weekly, fortnight, monthly depending on the quantum of your fund and how safe you want to play.

Are you shifting the money from liquid to equity because it is the right time to invest? If so, you have to keep a few things in mind. Nobody knows how the Coronavirus pandemic is going to unravel and how much time will it take for the market to bounce back. So, tread with caution. Make sure you have enough liquid investments to take care of a health emergency or a setback on the professional front. And if you can deploy the money for five to seven years, go ahead and invest it in a staggered manner.

Remember to choose an equity scheme based on your risk profile. For example, if you have conservative profile, choose large cap mutual funds. Investors with moderate risk appetite can invest in multi cap mutual funds, and aggressive investors can choose mid cap and small cap mutual funds.
(If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)

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