I invested in the infrastructure schemes of Tata, Birla and ICICI Prudential in January 2008. They are still down by about 35 per cent even after four long years. What should I do?
-C Costa
When investing in a thematic fund, the risk is always more apparent simply because you are casting your lot with a restricted universe of companies. And when the industry or sector goes through a rough patch, you, as an investor, will have to ride it since the fund manager cannot invest in any other sector or industry which does not fall within the stated theme.
But you have to ask yourself why you invested in these funds in the first place? Was it because you genuinely believed that the infrastructure sector had a lot of potential and it would make for a good long-term investment? Or did you just get carried away by the boom of 2007? Seems more like the latter. If that be the case, it would make sense to exit from these funds.
To add to your woes, you entered at the peak of the bull run. That is why we always advise our readers to invest systematically to avoid timing the market.
This article was originally published on May 11, 2012.
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