At present I have invested Rs 75,000 in new fund offerings. My investments were done in the past six months. Now I feel my diversification is very less as I have put money only in Franklin India Flexicap and Fidelity Equity Fund. Should I start SIPs from my salary in other established mutual fund schemes?
-Ashish
It is always better to invest in well-established funds through the SIP route. Therefore, should you decide to make further investments, you can choose a couple of funds with a good and consistent performance record over the long term and invest regularly in them.
Regarding diversification, the basic aim is to allocate one's portfolio across different asset classes in line with one's risk appetite and investment horizon. While diversifying, avoid adding similar-looking funds to the portfolio, as the only purpose it will serve is to increase the count of funds in your portfolio. Keep in mind your preferred debt-equity allocation, and select funds taking care that the portfolio remains diversified, unless you have a preference for any specific sector.
This article was originally published on October 27, 2005.
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