How many funds should I invest in?

I have Rs 35 lakh to invest over 8-10 years and plan to split it across seven funds. Is this a good strategy for a risk-taker? - Anonymous

For an experienced investor with Rs 35 lakh and an 8-10 year horizon, diversifying across multiple funds seems wise. However, managing seven funds might be overwhelming and less impactful. Instead, consider reducing the number of funds to five, allocating around 20 per cent to each.

Focusing on fewer funds allows for more meaningful allocations and ensures you stay engaged with your investments. When your money is concentrated around five funds, you're more likely to monitor the performance and make necessary adjustments. Conversely, spreading too thin can lead to complacency, where you might not give each fund the attention it deserves.

Also watch: How to diversify your investment portfolio effectively