Ask Value Research

Book profits in equity mutual funds

I am 34 years old. Does it make sense to book profits in equity mutual funds and move the money to a PPF account so that it's locked and can be used for my retirement?
- Sameer

Retirement is a long way off and you have sufficient time to accumulate your retirement corpus. Over the long term, investment in equities scores over other asset classes. Stay invested in equity funds and as and when you approach your retirement, shift to debt funds. At this stage in your life, there will be no benefit in moving your money to a PPF account as it would get locked into a static annual return of 8 per cent. On the other hand, by investing in diversified equity funds you can conservatively expect to earn around 10-12 per cent per annum over the long term.

This article was originally published on May 19, 2010.

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