I have a very basic question – when to exit a mutual fund (apart from when it is not performing good)? Does it also depend upon type of fund i.e. debt or equity?
Consider my case, I have been investing in an mid cap equity fund via SIP from the past 1 year. The sensex in the past 1 year has moved from 15000-18500 (for the sake of simplicty) and my fund NAV has moved from 45-53. From the past 3-4 months, the NAV is fluctuating between 52-53. The fund has definitely given me a good return in past 1 year. Though my investment goal is 5-7 years but I fear that the market will go down and so does my fund value and my profit. Moreover, I also fear that if I keep on investing in this fund, my average cost would go down and my returns would decrease.
What shoud I do? Should I stay invested and keep on investing even if the market goes down and NAV decreases or sell this fund and invest in debt fund?
One more thing, how long can I stay invested in a fund after I stop paying SIP?