While consolidating a portfolio, should one transfer the amount from existing equity funds to a selected set of equity funds in a staggered manner or will it be okay to move this amount at one go?
- Nitin Lodha
If you have decided the target fund and if you have already accumulated your savings and averaged your investments, then yes you can do that. Gradual investment is basically a tool to manage your anxiety and help you not to catch a market high. But in your case, you have already made investments and you are just consolidating. The only problem that you have to overcome is that you will be taking your money out and investing. So, don't get anchored to the value of your money that you accumulated and invested gradually.
Let us say it is something like 5 lakh rupees and you put it into the target fund. And tomorrow when you see it become 4.5 lakhs or 4.3 lakhs, you may think that your 5 lakh has been reduced i.e. we get anchored to the original value. Overcome that. Consider it as your already existing investments. Similar things could happen to your existing investments, too. But in that case, you will not be anchored and you will think that you have invested gradually over a period of time and the cost of these units will be different as compared to the ones that you will be buying at one go. So, yes you can move your money at one go but don't get anchored to the value at which you will be moving your money.