If you thought investing in equities was the right decision a few months ago, doubled your investment, and are now in losses—you are not alone. And if you think it is best to stay away from this losing asset class at this time and have started withdrawing money from the stock market, you are just part of the crowd. It is natural to chase trending investments due to the “fear of missing out” (FOMO), and it is also human to panic and try to avoid losses when the market falls.

But these same emotional decisions can make us buy high and sell low—a common investment mistake that eats away at our returns.

Imagine, if you could control your emotions while investing. If a professional would guide your investment decisions based on solid research and data instead of emotions? Someone who can make timely buy and sell decisions by remaining unbiased in the ups and downs of the market. This is where multi-asset mutual funds or asset allocation funds come into play.

By analyzing interest rates, inflation, market valuations, and other economic factors, these funds strategically divide their portfolios across equity, debt, and gold. Mitigate risk by exiting overvalued assets. Enhance long-term returns by investing in undervalued assets. Buy low and sell high, thereby taking full advantage of market cycles.

Multi-asset/asset allocation funds help investors avoid emotional decisions and stand out from the crowd by making smart investments. As the adage goes: “Be fearful when others are greedy, and greedy when others are fearful.”

With this in mind, investors can consider ICICI Prudential Asset Allocator Fund (FOF) for emotion-free, data-driven investing. The fund primarily does smart asset allocation across equity, debt and gold mutual fund schemes/ETFs based on an in-house valuation model. As of February 28, 2025, it has given an impressive return of 6.85% CAGR in 1 year, 11.80% CAGR in 3 years, and 13.69% CAGR in 5 years.

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