I have been investing in the following mutual funds for the past two years via systematic investment plan (SIP): HDFC Equity, Reliance Vision, DSP Merrill Lynch (now DSP BlackRock) Top 100, Kotak 30, SBI Magnum Contra and Reliance Growth. My query pertains to two of the funds in my portfolio—Reliance Vision and HDFC Equity—both of which were considered the flagship funds of their respective asset management companies. These two funds were recommended by almost every financial adviser, magazine and website but seem to have lost the limelight as of now. Please advise whether it’s prudent to stop, hold or continue SIP in these two funds.
In my opinion, you should continue with the SIPs as for long-term investors lower net asset values (NAVs) also mean more units.
When the market recovers then your chances of recovering your loss/earning profits would be higher due to averaging at lower cost.
However, you must note that you should have a time frame of two-three years for investment.
About the future of these two schemes, I think there is nothing wrong with them and they still remain attractive due to their track record.
I purchased 500 shares of GMR Infrastructure Ltd at Rs91 each. I can hold these shares for a maximum of two years. What should I do, hold or sell?
GMR Infra is sharply down due to a slump in the market. But if you remain invested for two years, I think you would be able to earn a profit on your investment.
You must note that the market continues to be very volatile in the short term and a further fall cannot be ruled out.
A downswing, however, can also be an opportunity if you have investible surplus and a long-term horizon for investment.
Is it the right time to invest in tax-saving mutual funds or will I get even better NAVs later during the year?
In the present circumstances, it would be better if you take SIP for tax-saving schemes.
Since the lock-in period for such schemes is three years, it would be better to start investing now rather than waiting for the year-end.
Answers are based on a technical analysis of the markets and individual stocks. The views expressed on this page are not the newspaper’s opinion and are provided for information purposes by Vipul Verma. Readers are requested to do their own research before participating in the stock markets. Neither the paper nor the information provider will be responsible for any outcome based on information provided here.