Do large-cap mutual funds always go up in the long-term or is there a possibility of going below the market value at the time of purchasing it?

This is quite a common misconception among new investors. Many of them believe that large-cap mutual funds can never result in alossinlong-term. Historically, to an extent, this claim seems quite legit. However, when put theoretically, that’s not how financial assets work.

It has been told time and again, in the financial market, no investment isfoolproof. Even the safest bet has risks involved. So to say large-cap mutual funds are safe for the long-term would be quite unjust. Because the past track record doesn’t guarantee a similar result in the future. An awful lot of factors come into play when deciding the boom and bust of the market, including, in sensitive countries like India, the political scenario, inflation,andfiscal policies.

So if you’re investing in this asset for the long-term, don’t simply assume that your investment will bring you big return. There’s anequalchance of its price falling below the market price of years before. So be selective in your choices and stay prepared for the loss.