The last seven days have been exciting for the investors as both Sensex and Nifty kept touching new highs throughout the week in the midst of a clear win for Narendra Modi-led NDA in the 2019 Lok Sabha elections. On Friday, a day after the historic win, the investor wealth zoomed Rs 2.53 lakh crore. Led by the rally in equities, the market capitalisation of BSE-listed companies rose by Rs 2,53,830.19 crore to Rs 1,52,71,407.47 crore. And, a stable government now allows the investors to re-work their strategy and park the money which was lying ideal due to elections, believes Vidya Bala, Head of Mutual Funds Research at FundsIndia.com.

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Vidya told Zee Business Online that the idea of mutual funds, especially through SIPs is to not time the markets. Which political party comes into power also has no bearing on one's investment needs. "Investors should continue to apply their investment strategy and if money is lying on sidelines, waiting for elections to conclude, it may be deployed systematically now," she added. 

Asked what funds should investors target in the current market scenario, Vidya suggested to opt for a combination of diversified and midcap funds. "....especially those with a portfolio biased towards cyclical sectors may be good choices now an the equity space," she said. 

However, she believes that the present market rally is sentiment driven. "The present rally is sentiment driven. We need earnings growth for markets to move further. (we do not give any levels to market)," Vidya said. The new government will have two tasks in hand. The immediate challenge would be to handle the liquidity crisis in NBFCs and the long-term goal would be spur capex spending.

"From a distributor's perspective, the recent debt crisis in the NBFC space has shaken the retail investor's faith in mutual funds. The government and regulator need to work closely with both fund houses and rating agencies to ensure that the retail investors receive fair investment outcomes and are not at an disadvantage compared with institutional investors," she said.