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Disappointing returns

Diversify across fund houses to avoid concentration risk because a manager's choice of stocks may not always work

I invested Rs 3 lakh in HDFC Equity in two separate years and the returns have been disappointing so far. Should I book losses or continue with the fund?

This fund has been disappointing for known reasons. The fund manager's preference to avoid pricey stocks and stay with fairly valued companies has led to the setback in performance. Although you shouldn't have made a lump sum investment, the current situation is disappointing for a regular investor too. Diversification is an aspect to worry about in your portfolio. You can take out 75 per cent of your money and diversify it into three other funds. Also, spread your investments over six months. Markets see big ups and downs on a daily basis. You should be able to average its effect by spreading your investments. Though your money is losing value, this is not the way to look at equity. Equity markets have been range bound for a long time, and you will see returns only over a longer period.

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