New Delhi, July 1 -- If you give investors a long-term chart of the Indian equity market, they will be able to tell you that the right time to buy was when prices were low, and for profits to be booked it was when they touched highs. But what does the actual data show? Here is how equity inflows into mutual funds (MFs) have varied with market moves.

During the 2004-07 bull market, the BSE 500 TRI (total return index) quadrupled from around 2,000 to nearly 8,000. The Sensex doubled from the start of 2003 to the end of 2004 and then tripled again over the next 3 years, thus becoming six times in about 4.5 years. During this period, monthly equity MF inflows more than doubled from around Rs.5,000 crore to Rs.11,000 crore, with the strongest...