iStockI am investing through a monthly SIP of Rs 2,000 in Mirae Asset Emerging Bluechip Fund (direct), Rs 5,000 in Axis Bluechip Fund (direct), and Rs 1,000 in Parag Parikh Long Term Equity Fund (direct). I am 29 years old and I want to purchase a house after five years. I have been investing for one year. My risk profile is moderate. Am investing in the right schemes?
-Akhil Katiyar
We believe one should invest in equity mutual fund schemes only if one has a long investment horizon of at least five to seven years. Hope you can postpone your house purchase for a few years if the stock market is going through a very bad phase.
An investor with a moderate risk profile is typically asked to invest mostly in multi cap schemes. If he wants to reduce the risk by diversifying, he is also asked to invest a small part of his portfolio in large cap mutual funds.
You are currently investing in a large & mid cap scheme, large cap scheme, and a multi cap scheme. The large & mid cap scheme may not be suitable to your risk profile as it has the mandate to invest at least 35% in mid stocks and 35% in large caps. Mid cap stocks can be extremely risky. They can also be very volatile during a rough phase in the market. Make sure that you are okay with the extra risk in your portfolio.
You can reassess your risk profile and make sure that your portfolio is in line with your risk profile. Seek the help of a mutual fund advisor if you cannot do it on your own.
It is always better to put a number to your goal and start investing to achieve it. For example, find out the current cost of the house you are planning to buy and start investing to achieve the target corpus.
-Akhil Katiyar
We believe one should invest in equity mutual fund schemes only if one has a long investment horizon of at least five to seven years. Hope you can postpone your house purchase for a few years if the stock market is going through a very bad phase.
An investor with a moderate risk profile is typically asked to invest mostly in multi cap schemes. If he wants to reduce the risk by diversifying, he is also asked to invest a small part of his portfolio in large cap mutual funds.
You are currently investing in a large & mid cap scheme, large cap scheme, and a multi cap scheme. The large & mid cap scheme may not be suitable to your risk profile as it has the mandate to invest at least 35% in mid stocks and 35% in large caps. Mid cap stocks can be extremely risky. They can also be very volatile during a rough phase in the market. Make sure that you are okay with the extra risk in your portfolio.
You can reassess your risk profile and make sure that your portfolio is in line with your risk profile. Seek the help of a mutual fund advisor if you cannot do it on your own.
It is always better to put a number to your goal and start investing to achieve it. For example, find out the current cost of the house you are planning to buy and start investing to achieve the target corpus.
( Originally published on Aug 25, 2020 )
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