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Exit JM Basic

The fund has been a laggard for a long time & investors should consider exiting it…

I purchased units of JM Basic Fund in December 2007 when the NAV was Rs 32.71; it is currently around Rs 12.60 after being invested for three years and three months. Should I exit of constunue with my investment?
- DR B K Agarwal

JM Basic is an equity diversified fund scheme that invests in sectors categorized under basic industry in the normal parlance and in context of the Indian economy, including but not limited to, energy, petrochemicals, oil & gas, power generation & distribution and electrical equipment suppliers, metals and building material.

You bought this fund just as the markets were approaching the peak before the downturn of 2008. One can understand the loss that you are facing and its impact on your finances. However, you need to realise the opportunity loss that you have faced by not exiting this fund and investing elsewhere to cash on the market rally from March 2009. It's not too late for you to bring discipline into your investments.

The lesson for you is that investing works well if it is systematic and regular and not a one-time exercise. You should exit this fund, cut your losses and invest in funds that have provided consistent returns, have a performance history and track record. Select funds that are likely to give stable returns and avoid investing in lump sum and choose the SIP route instead.

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