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Never a Good Time to Time the Markets

Systematic investments in equity funds work best when you invest through the ups & downs of the markets

I have SIP investments in the direct growth option of the following funds - DSP BlackRock Top 100, HDFC Top 200, ICICI Prudential Focused Bluechip, IDFC Premier Equity, SBI Emerging Businesses and UTI Opportunities. I am earning handsome returns to the tune of 15-20 per cent from these funds. Will it be a wise thing to transfer my profits to liquid funds right now and move the money back to these funds when the markets correct?
- Suresh Katkar

If you have invested in equity funds, you must have done so with a long term horizon or a financial goal in mind. Now that your funds have finally begun to deliver good returns, why do you want to stop the investment? Stay on continue to invest and enjoy the rewards of equity investing! The fundamental purpose of a Systematic Investment Plan is to invest in a disciplined manner without timing the market. The investment works best when you invest through markets ups and downs.

Your choice of funds has been fairly good. The only reason to redeem your funds now would be if you need the money within 2-3 years. In this case, you must start switching to debt funds to lock-in returns generated so far. But if you can hold on, you need not redeem your SIP investments just because gains have been good. They can certainly get better if this rally sustains. And redeeming also brings with it the reinvestment risk. Markets are uncertain. You never know how much you may have to wait for the next correction to resume your investments. We recommend that you keep investing if you have long time to realize your goals.

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