Hi Basu sir,
I am regular follower of your blog and I have suggested many of my friends to go through your blogs also. Based on your financial advisory articles I have set my goals and have invested with formula of 30 and 70 ration in debt and equity products. I have started investing in MFs (Large cap (50%), mid cap (30%) and small cap (20%) – standard market ratios) for around 18 months as part of my equity portfolio. I understand for the results from MFs one has to invest for at least for 5 years for better results. But I have 2 of my funds which have stayed always negative from past 12 months, but I never stopped investing. Its L and T emerging fund and Reliance small cap fund. Do you suggest me to continue holding these funds or shift to other funds? I selected this fund based on certain basic research from my end not anything exclusively. Please suggest me whether its good to hold this fund or shift to others?
The asset allocation you are following is for the goals which are beyond 10 years. Hence, don’t consider the same asset allocation if your goals are less than 10 years. Regarding the small cap funds, they are volatile in nature. If you can digest such volatility, then stick to them. Otherwise, you better be invested in one Large Cap and one Mid Cap Fund.
I agree this asset is for more then 10 years goals. In this 18 months these 2 small caps were always negative which i have invested. In mutual fund market there are few other small cap funds were in positive range. Offcourse the same fund cannot perform good every year. But i felt scared looking at negative returns of these 2 funds and got doubt whether to continue or shift to other small caps which are currently better. Hence came in for your suggestion. Any additional comments to this would help me please