Is this the right time to enter or exit mutual funds?
Sanjay posted the following comment a few days ago, and I’ll try to pen down some thoughts that I have on this.
SanjayÂ January 17, 2013 at 1:26 pmÂ 
Is this the right time to enter or exit Mutual Funds?
Given that the market is at a two-year high, what should be oneâ€™s approach to Mutual Funds?
My situation: I have been investing in the HDFC Top 200 Fund (monthly SIP) since 2010. The investment was done with a view to hedge against inflation and build a retirement fund (retirement is more than a decade away). HDFC Top 200 is currently showing a net gain of 15.22% for me. Should I continue investing in the fund given that the market is at a 2 year high or suspend investing (but not sell/redeem my existing units) till such time the market falls again?
Can you explain how should one treat mutual funds? Are we supposed to keep investing them till such time we want to (in my case retirement) or are we supposed to sell/redeem when the gains are good (example lets say 30%) and then re-purchase when the market falls?
The Nifty P/E is currently 19 which is not crazy high and if you have just made 15% on your portfolio, I don’t see a good reason to sell and lock in your gains because they aren’t very substantial gains to begin with.
However, this may not be a good time to begin fresh investments and in my own case I have sold some stocks in which there wereÂ sizableÂ gains and am waiting for the next time of crisis to really step up investment.
If you have just ten years left for your retirement then I would say this is not the time to get aggressive, and it is much better for you to be conservative with your investing, and invest only a small part of your money in equities anyway which can be quite volatile, and if you want to increase that investment it should be during times of panic and crisis and not times such as these when everyone is excited about the markets, so conserve cash now and deploy it later when there is panic.