Mutual funds may have gained currency after demonetisation, but most investors still look at mutual funds only as a short-term bet. According to an AMFI report, only 30.40 per cent investors in equity mutual funds stay invested for more than two years. This data is as on March 31, 2018. AMFI releases this report every quarter.
This data clearly shows that most investors do not understand that they should invest in equity schemes for a longer term horizon to achieve their long-term financial goals. Mutual fund advisors say investors should invest in equity mutual funds only if they have an investment horizon of at least five years.
The report also shows that 10.1 per cent investors invest in equities for up to one month, 10.5 per cent invest for one to three months, 11.3 per cent remain invested for three to six months, 18.7 per cent invest for six months up to an year and 19 per cent invest for a term between one and two years.
he data clearly suggests that most investors do not understand the basics of equity investing. They do not understand the risk associated with investing in equity. There are countless studies which show that investing in equity mutual funds with a short investment horizon can result in loss of money.
