Where should I invest at a time like this to reap maximum benefits? I am a new investor and I have been investing small amounts for the past few months. I don’t have a problem with market fluctuations as all my goals are long term. My risk appetite is between high and moderate.
Adhil Shetty, CEO, BankBazaar says, “The sliding markets may present an opportunity to investors to accumulate more mutual fund units at deep discounts. SIPs are better equipped to absorb market shocks and fetch desired returns in the long term. Instead of stopping SIPs, increase them if they’re in line with your long-term financial goals. If finances permit, this is a good time to augment your investments. Look at 5-10 year returns to take a decision. You can invest in large-cap funds such as Canara Robeco Emerging Equities Fund, L&T Large and Midcap Fund, or SBI Large & Midcap Fund. It would also be wise to diversify your holdings across asset classes by investing in both debt and equity, to ensure that your overall portfolio provides you with a good return over time. Towards the end of your investment period, consider moving your equity investments to debts.”
I have a substantial amount invested in Aditya Birla Sun Life Medium Term Plan. The current value of the investment is Rs 32 lakh. Since the fund’s performance has been bad for the past few years, should I redeem? Please suggest an alternative debt fund. I can remain invested for seven years.
Raj Khosla, Founder and Managing Director, MyMoneyMantra.com says, “Given the time horizon of 7 years, I would recommend rebalancing your portfolio. Redeem the existing fund and invest in liquid funds. Then set up systematic transfer plans into balanced funds. Build an emergency corpus by transferring Rs 5 lakh into DSP Liquidity Fund. Transfer Rs 12 lakh and Rs 15 lakh into ICICI Prudential Liquid Fund and Kotak Liquid Fund respectively. After this start STPs of Rs 20,000 and Rs 25,000 towards ICICI Prudential Regular Saving Plan and Kotak Debt Hybrid Fund respectively, for 5 years. When your goals are two years away, start a Systematic Withdrawal Plan and realign portfolio towards debt funds. This way you can maximize returns and ensure capital protection.”
