Dhirendra Kumar reviews a portfolio and highlights the importance of perseverance in equity investing
I have invested in the following mutual funds - SBI Bluechip, Mirae Asset Emerging Bluechip, IDFC Tax Advantage Fund and Aditya Birla Sun Life Equity Fund. However, the returns of my portfolio are negative. Should I continue investing or exit?
- Anshuman Das
Your investments are good. However, if you have started investing for the last one year, it's bound to be negative. Although it may be uncomfortable for you to invest while the returns on your investments are negative, the good news is that you are now investing cheap. If you are investing for a time period of 5-10 years, it should be the ideal tenure. But this is easier said than done. Times like these require perseverance.
Surprisingly, the markets have done exceptionally well for the past two months. However, it shall not be surprising if the market struggles for the next one or one-and-a-half year before corporate earnings start stabilising and growing. The entire case of equity investing is growth, companies should start making more money and that is when stock prices go up in a fairly justifiable manner. If stock prices go up for any other reason, they generally tend to be unsustainable.