Key Points:
- When the value of your mutual fund drops, re-evaluate your investment goals (short, medium, or long-term) to understand your risks and needs.
- If you need funds soon, consider switching to a safer mutual fund through the digibank app, which offers recommendations from over 60+ mutual funds.
- Buy more or cut your losses: buy more if it's a long-term investment or cut your losses to avoid greater losses, with the help of the digibank Advisor for the right decisions.
Need to adjust your investment portfolio accurately?
Investing in mutual funds is a way to achieve financial goals with optimal returns. However, sometimes the value of investments decreases, making us anxious. Don't panic—let's discuss how to handle it!
What can you do when mutual funds decline or stagnate?
- Review Your Investment Goals
We all have different financial goals. When the value of your investment drops, the first thing you should do is review your investment goals. Is it for the short, medium, or long term? By understanding your goals, you can map out the risks and needs, so you'll know what steps to take with your current mutual fund.
- Switch Mutual Fund Products
Switching mutual funds can be a solution if you need funds within less than a year. For instance, if your investment has an unrealized loss of about -5% and you plan to withdraw the funds in 6 months, it’s better to switch to a safer mutual fund, like a Money Market Mutual Fund.
In the digibank App, you can easily switch mutual funds. Select your portfolio, click on Switch Transaction, and choose the mutual fund you want to switch from and the target mutual fund. You can also get investment recommendations from over 60+ mutual funds categorized into three categories: best performance, most popular, and highest scoring.
- Buy More or Add Mutual Funds
When prices drop, this can actually be a moment to buy more if your investment goal is long-term. For example, if you invest Rp10 million with a NAV per unit of Rp2,000, you get 5,000 mutual fund units. When the NAV per unit drops to Rp1,500, the investment value drops to Rp7.5 million. In this situation, you can add more investment. For instance, add another Rp5 million, making your total investment Rp15 million with an average NAV per unit of Rp1,800. This way, the percentage of your loss decreases and the potential for profit is greater when the price rises again.
- Cut Your Losses Immediately
Wait a minute, we suggested buying more, but now we’re talking about cutting losses? Cutting losses is a strategy to avoid greater losses by selling mutual funds at a price lower than the purchase price. This strategy is used to reduce losses from falling mutual fund prices, especially when the market is under pressure. Stay calm and don’t rush to make decisions. Calculate carefully and you can get assistance from the digibank Advisor.
There's no need to be afraid of this situation. In investing, it’s important to have a strong mindset and commitment, as well as the right financial strategy. Don't panic and make hasty decisions. Whatever your investment goals, they can be achieved with the right approach and plan. With the digibank by DBS app, you will be guided in managing your finances and investments, including getting notifications when it’s time to adjust your investment portfolio, guidance from DBS expert teams, and reliable market insights!
