VR Logo

How should I address the decline in the value of my holdings in 15-20 schemes?

Consolidate your portfolio irrespective of its current value but consider exit load and short-term gain liabilities while consolidating, suggests Dhirendra Kumar

In a period of over five years, I have spread my investments, amounting to Rs. 70 lakh, over 15-20 schemes. You often ask to limit it to two to four schemes. So, in view of the declined values, what should I do?
- Ashish Pandey

The present value of your investment is the one that should matter now and not the initial amount that you invested. That is because, in some of your investments, you will have some gains, while in others, you will have some losses. Today's value is what should matter. All the gains and losses are a function of time in the market.

Assuming that you invested some money in January 2020, you might have encountered losses in those. And if you had made some investment 15-20 years ago and if you had looked at its value so far from January, it would have had losses as well, which is not getting registered in your mind. So, it is really a function of time. Just remember that the current value of your investment is what should matter. All the previous gains and losses are completely reflected in this investment value.

Clean up your portfolio and reorganise it. You may consolidate your portfolio into two-four schemes and choose these from the schemes in which you have already invested. Sell all other investments and move that money to these two-four funds. Forget about all the past gains and losses.

Just be mindful of all your investments where you have short-term capital gains or where you might have some exit load that will be applicable. Don't move that money to the extent that you can save on taxes. Defer it by about a year i.e. till any exit load is applicable and save on it and also reduce your short-term capital gains tax liability, if any. These two things should be the only constraints and nothing else. Fix your portfolio to your desired level of ability to manage and stay invested.

Post Your Query