What should be your approach in MFs as equity markets bleed?

Being enveloped with downbeat global economic news, Indian equity markets have corrected by good -12.8% in the present quarter (i.e. from July 1, 2011 to September 22, 2011) and 22.1% since the last high 21,004.96 – made on the November 5, 2011 (the Muhurat Trading Day). The backdrop of following global economic events has literally sends shivers down the spine of several investors – both in Developed Markets (DMs) as well as Emerging Markets (EMs).

• Debt overhang situation in the Euro zone
• Downgrade of Greece’s sovereign rating from “Caa1” to “Ca” by Moody’s
• Downgrade of Italy’s sovereign rating from "A+/A-1+" to "A/A-1".
• Downgrade of U.S. sovereign rating from ‘AAA’ to ‘AA+’ with a negative outlook [due to increase in debt-ceiling limit to U.S $16.4 trillion, in miic grdst of dismal economowth rate (last quarter i.e. April 2011 to June 2011, GDP growth rate was mere 1.00%) and rising unemployment rate (9.1% in August 2011)].
• Accentuating inflationary pressures in the Emerging Market Economies (EMEs), including India

But rather than pressing the panic button and following the herd mentality; if we look at India specific economic dynamics, realisation would dawn that the GDP growth rate offered by India is far more appealing than in DMs।