I have SIPs of Rs 2,000 each in SBI Magnum Global, SBI Magnum Contra and SBI Magnum Taxgain. The dates are with a 10 day gap between each. I would not like to invest in the market on those days. I try to spread my investments over a month. Is this good? Should I span my investments over two years, rather than one? What's your opinion on these funds?
-Anand S
It's always good to spread your investments over months and certainly not a bad idea to do so in a single month too. All it needs is extra management of remembering due dates and ensuring that you maintain enough bank balance on these dates. Now that you have chosen these funds and spread your investments, avoid adding more funds to your portfolio. The SIP will average out the cost of your purchase.
All the three funds are five-star rated with a good performance track record. But you are overexposed to one fund house, assuming that this is your entire fund portfolio. You must also diversify across various schemes of different fund houses. Why don't you start an SIP in a mid cap fund like Sundaram Select Mid Cap or Reliance Growth and discontinue investing in SBI Magnum Global? But don't redeem the already bought units.
For deciding the time period of your SIP, you need to identify your strategy. If you have opted for these SIPs just to deploy a certain amount, then a one year SIP is enough. If this is an on-going investment then you can continue with a long-term view.
This article was originally published on March 17, 2008.
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