Can I invest a lump sum in this volatile market? Of large, small, mid and multicap, which funds are preferable? Which is better for a time horizon of five years? Please name the best funds.
- Jayant Rathi
I always urge, even when it comes to investing in stocks, that once you have made a list of stocks to invest in, decide upon your price range and never invest at one go. More so in times like this. Because I won't be surprised if the markets that we are looking at today go down, let's say by 20 per cent. I also won't be surprised if it actually goes up by about 20 per cent. Investing a lump sum now will be a missed opportunity if things go down by 20 per cent and it will be a missed opportunity if you don't invest a lump sum in the other case. So, how to deal with this?
That is why, you should always spread your investments while investing in equity, more so if you have a large sum of money. This is because the regret of investing a large sum of money and losing it in a brief period of time, even though you are investing for the long run, hurts. It hurts to such an extent that to overcome that hurt, many times, we act in huff and panic, we try to take all our money out and all those losses become permanent and forever. Not only that, it deprives you of this beautiful mechanism of being able to become an equity owner in the long run. It deprives you of this beautiful avenue that provides an opportunity to every citizen who has some savings to invest and aspire to be relatively wealthy in the world.
So, never invest lump sum. Keep it simple, so invest in a multicap fund because it should have all the diversification you need. I am listing some funds, but to gain a clear understanding, you should take a look at our publications where we help our subscribers make the right choices. The best multicap funds by our selection are ABSL Equity fund, Axis Focused 25, Franklin India Focused Equity, Invesco India Contra fund, which is a value-oriented multicap fund by our measurement and Kotak Standard Multicap.