I have invested Rs 5,000 in Prudential ICICI Child Growth Gift Plan. Should I hold the fund or sell it? I can buy it after the market comes back to a lower level. But I am not very sure as I sold Templeton India Growth at Rs 17 thinking that it would not go any higher and now it has gone up to Rs 22.
Your experience in Templeton India Growth Fund is a lesson in itself. This experience should convince you that it is impossible to time the market. One can never know with certainty whether the market will go higher or if it is at the highest point and will fall from there. In view of this fact, what you are attempting to do with Prudential ICICI Child Growth Gift Plan is a futile exercise.
What you should be doing instead is focus on your requirements. If you have invested in Prudential ICICI Child Growth Gift Plan then you would be saving for a long-term need such as a child's education. This does not change on a day-to-day basis.
Admittedly, it is tempting to try and raise profits from short-term movements of the market, but as your own experience has shown, getting this right each time is not possible. Also, there are costs associated with this exercise in terms of taxes, and the time and effort that you have to invest. Every time you book profits, you will pay capital gains tax and this means less money for your child's needs.
If you had a portfolio spread between equity and debt funds, we would have suggested that you rebalance the portfolio from time to time. As Prudential ICICI Child Growth Gift Plan is a balanced scheme, the fund manager takes care of the rebalancing. After investing in such a fund, your role is only to let time take its course to deliver returns which will meet your needs. So, sit back and relax.