2 months ago

Your Questions Answered: I want to diversify my portfolio. Please elaborate on contra mutual funds and how do they work?

Q. I am a nurse working with a multispeciality hospital in Ghaziabad. The stock selection process for contra mutual funds involves several steps: Identifying undervalued stocks: The fund manager uses various financial metrics and analysis techniques to identify stocks that are undervalued. Contra mutual funds can take advantage of these opportunities by investing in these undervalued stocks, positioning themselves for substantial gains when the market recovers. Risk-tolerant investors: Investing in contra mutual funds involves a certain level of risk, as the fund manager is betting on stocks that are currently out of favour. The benefits of diversification, long-term growth potential, capitalising on market cycles, professional management, and risk mitigation make contra mutual funds an attractive option for investors looking to achieve substantial returns while managing risk.

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