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Which mutual funds should a 39-year-old invest in?

Dhirendra Kumar advises an equity investor who is unhappy with his fund choices on the approach he should follow

I am 39 and will retire this year. I have an investment of Rs 26 lakh in equity and Rs 20 lakh in mutual funds. Please recommend some mutual funds for a long-term horizon. I am not satisfied with my mutual fund investments but I don't have any dependence on them in terms of getting a fixed income.
- Siddharth

I don't know about your future plans or whether you are going to have some incremental income from any new profession, but with an investment of Rs 46 lakh in total, I really think you need to get your act together. If you are happy with your stock investment, then maybe gradually move your money from mutual funds to that or if you are unhappy with your stock investment, then move it to mutual funds. Invest in one or two good multi-cap funds. Also, you don't really need to stagger your investments or do your SIP because all your money is already in equity and hence, you are already used to the ups and downs of the market. Just reorganise your portfolio.

You can invest in stocks if you have the time and inclination to do extensive research on companies. Understanding where you are investing and making them work is very important. It also helps you keep track of your investments and give you confidence that helps you not to panic when the market is volatile. Most of the time, people panic because they don't know where their money is. They think that somebody has run away with their money when the markets go down. That is why, I even keep telling my Stock Advisor users that they should read, learn and then invest in a company because the company's stock price will actually act in a very funny fashion. I come across a lot of companies which are doing well and the market opens and they fall by 7-9 per cent in a day. Hence, if you don't have the conviction on companies that you are investing in, then the price movements can drive you out of the market. So, it is important to understand and learn about companies and then invest and if you can't do this, then put all your money in one-two multi-cap funds.

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