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Give Equity Time

Two years is a short timeframe to evaluate your equity funds, especially in poor market conditions…

I had invested lump sum in HDFC Top 200, HDFC Equity, DSPBR Small and Mid Cap and ICICI Pru Discovery in 2010. I have not seen any growth in these funds since then. Is it because I had invested in lump sum? Should I redeem these investments and make fresh SIP investments in these funds?

Changing your lump sum investments to SIPs will not help in achieving huge returns overnight. Besides, two years is too short a time frame to get so critical with investment returns, especially when in this phase the stock markets have done poorly. All the four funds that you are investing in are good with a proven track record and are highly rated. When investing in diversified equity mutual funds, consider a time frame of 3-5 years or more to get the best results from diversification over market cycles. We do realise that you must have had an emotional blow looking at the state of your investments after two years. It is for this reason that we recommend regular investments through SIPs, which averages out your investments over time. We suggest you make systematic incremental investments in the same funds and continue holding on to these investments.

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