Thanks for your help till now. I am a regular SIP investor in mutual funds from last 3-4 years and plan to carry on the same in future also. I wanted to check, should I diversify by investing in stocks also or if I am doing both stocks and MF then it is not a diversification. I have some extra cash and wanted to make the best use of it. In stocks as a newbie was thinking of starting with large cap stocks(with highest market cap) initially and then move to others once I have more knowledge in this area.
Any feedback from you will be of great help
The reason that is recommended over owning a single stock is that owning an individual stock would carry more risk than a mutual fund.
The reason why people hesitate to invest in stocks is because the risk involved is very high. The risk is much reduced in case of systematic investment plan by known companies like Kotak Mutual Funds. Visit the company website to know the different plans they offer and then pick the right plan as per your investment budget.
Whether you invest in mutual funds or stocks depends on three factors. First, you must decide how much risk you can tolerate versus how much return you want or need.
It also depends on how much time you have to research your investments. That includes how much you enjoy researching financial statements or fund prospectuses.
The third factor is what type of fees and expenses you are willing to endure. If you plan to buy and hold, you don’t want annual fees. You’ve also got to consider the tax implications.