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Post-Loss Action

Don’t shun funds after booking losses. Instead start afresh methodically

I had invested in four dud funds before October 2008 when every agent said that they were good. The funds were Birla Long Term Advantage, Birla International Equity, Tata Indo-Global and Reliance Equity. Should I exit?

All the four are new funds and they do not have proven credentials. After launch they faced a declining market and some of these funds did not work out the way they were expected to. Reliance Equity has been able to protect the downside better than the other funds, but that is no consolation as people invest in equity to make money and not to lose less and it has faced a decline. Similar is the case with Birla Long Term Equity. Tata Indo-Global may well be an avoidable case. It is an infrastructure sector fund and would invest in those kinds of companies.

For you, it would be better not to get frustrated and instead do invest regularly. You should choose a few good equity funds. And you can pull out your money from the others. You would have recovered a significant part of your losses by now. The market is doing well and it is about time to square up with these funds and get into proven funds in a methodical way with an organised portfolio consisting of three-four funds.

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