I am a 30 year old salaried person with high income. Since the last three years, I have been investing in mutual funds regularly through the SIP route. I am a long-term investor and invest in mutual funds to build my retirement corpus and child's education & marriage, who is just two years old now. Since I am investing with such a long-term horizon, is it safe for me to just keep investing without any selling for years to come? I just keep following your ratings and if a fund drops below 3-star, I stop investing it. But since I am looking for the long-term, I am not booking any profits or loss.The recent market turmoil has wiped off all my gains of the last three years. Even after investing for three years I am having about 20 per cent net loss in my portfolio. My worry is as I invest for another 8-10 years and after that if another such market cycle comes, then all my patience and discipline will go waste. Please suggest what strategy should I follow with such long-term horizon with respect to buy, sell, reshuffle etc.
- Vikalp Agrawal
Follow the simple strategy like, invest in top rated funds, keep a proper portfolio allocation between equity and debt (depending on individual needs and risk bearing capacity), review and balance your portfolio at least once a year and invest regularly through SIP route.
Considering your age profile and a huge corpus for child's education, marriage and also for your retirement, it would be better to choose three or four top star rated well-diversified funds having a sound track record and remain invested for long period. Shift to top rated funds in case the funds where you have invested do not perform compared to their peers.
If you have a balanced and sound portfolio and are looking for a long term investment then there is no need to worry about the market mayhem.
This article was originally published on November 28, 2008.
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