The stock market in India

The recent ups and downs in the Indian Stock market have been causing concern to people.There have been unexplained bullish and bearish trends in the market.The investors particularly the retail ones are having a real dilemma whether to continue or exit.Mutual funds are reporting heavy exit by retail investors who are fearing the worst.The situation however is not that bad.For those who want to get rich overnight,the stock market may not be the right place at present.However the long term prospects do not envisage any cause for concern.What is happening at present is that the market is in correction mode with the real value of each scrip being decided by the market itself.It makes sense to stay invested for about two to three years so that there is a steady growth in the portfolio.For people who are worried about their investment,it would make sense to invest in the debt instruments.The returns on these instruments may be much less than equities but at least they are not subject to the vagaries of the stock market.It is always better to have a good balance between investment in equities and debt instruments.If high returns are expected have more investment in equities and less in debt instruments.If one needs a safe avenue,put more in debt instruments and less in equities.This is precisely where a mutual fund is beneficial.The fund manager in the fund decides about the optimum investment in both types so that the returns are also decent.The individual is spared the daily agony of going thro the market trends and changing his portfolio to be in line with the trend.However it is wise to be patient while investing with a mutual fund.Do not expect windfalls.The returns will be steady and good.One however needs to choose the fund with care.Do not go by past records only as this is no indication of future performance.A combination of performance,service,history of the fund,the promoters and their reputation in the market would be some yardstick for where to invest.