I have SIPs in HDFC Equity, Fidelity Equity and Franklin India Bluechip for long-term investments. Should I invest in these funds for the short term and then review the SIPs or stick to investing in them for 3 to 5 years considering their track record? — Shibu Chakraborty
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Excellent fund selection in terms of performers. Your portfolio is well diversified across categories and fund houses. Yet one must look at the fund performance at least every quarter to see how it is performing vis-à-vis its peers and benchmark. If the fund is consistently downhill, it would make sense to replace it with another one from its category.
When investing in any equity product, one must always have long-term view in mind. Never invest in equity with a short-term view in mind. A minimum three years time frame is good enough. Also, if you sell your units in an equity fund within a year of buying, you end up paying short-term capital gains tax.
This article was originally published on August 05, 2011.
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