Business is booming.


The stock market falls 1,000 points one day and shoots up 900 points the very next day. Again, the stock market goes down another 4-digit number the other day.

No, this is not an imaginary conversation or scenario. This is what highly-driven Sensex-watchers are discussing among themselves these days, after observing a considerable swing in the market index past few months, owing to the widespread pandemic across the world. Being scared and intimated by these sharp rise and drops, some investors wonder if they should miss their Equity Linked Saving Schemes (ELSS) this financial year. Some of them are even considering the next financial year. But is it a wise decision?

Volatility scares investors, especially for the investors who are new to the investing world. Whenever there’s a significant volatile phase in the market, it is usual for investors to ask mutual fund expertsif they should continue with their investments. Some fence-sitters would even wonder whether ifthey should postpone their mutual fund investments owing to the prevailing volatile conditions in the market.

As expected, advisors talk about the omnipotence of equity funds in creating wealth in the long run. This is why they recommend investors to ignore short-term volatility and continue with their investments to meet their long-term goals.The issue is that in times of unpredictability, such talksoften sound self-serving. However, that is the only way to build wealth over a long period to meet your essential goals,such as a child’s higher education, retirement, etc.

If you are not convinced about why you should remember that these funds are the go-to investment option for several investors for a reason. ELSS mutual funds offer the dual benefits of tax-saving attributes and capital appreciation. As an investor, you can claim tax deductions of up to Rs 1.5 lac by investing in these tax-saving mutual funds. You can save up to Rs 46,800 by investing in these ELSS tax-saving mutual funds.

Whether you should sell your ELSS investments or not, entirely depends on your personal financial situation. If you need the money, you might as well withdraw. However, if you can stay invested for another 4-5 years, drop your impulsive decision to give ELSS funds a miss this financial year. Surely market might remain volatile for a couple more months. Still, nobody can time the market correctly, and you should not even try. If you shift to another fund, the tax treatment and exit load will begin again from the date of investment, which should be avoided.

Before taking any investment decision, always consider your financial goals, risk apettite, and investment horizon. Make sure that your investments are in line with your financial portfolio. You can also invest in ELSS viaa systematic plan or SIP (systematic investment plan) at the beginning of the financial year. Happy investing!

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