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With my goal being two years away, should I stay invested in midcap funds?

Dhirendra Kumar tells what to do when one gets closer to a financial goal

I have two years time to reach my goal. Should I stay invested in mid-cap funds or should I move my investment to large cap schemes?

Neither. But it entirely depends on how negotiable is the goal. If you definitely need the money in two years from now, then take your money out gradually over the next 18 months or two years time and move that money to a fixed income fund.

As you do your SIP, you should also do a systematic withdrawal plan (SWP) before you need the money. So, if it is for a non-negotiable goal, and you have achieved the required level of money, move it to fixed income. Once it is moved to fixed income, it is unlikely that the money will fall substantially in value. But it is also unlikely that the money will give you any extraordinary return and that is the trade off.

That is what you should do when you get closer to your goal. Gradually move your money to fixed income.

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