Debt Investment at this juncture

POSTED BY Sumit ON October 2, 2010 11:58 am COMMENTS (3)

Hi, I have investment of about 30 lacs in equity mutual funds. since the market level is reasonably high at this point, thus, i have redeemed 40% of my long term equity mutual funds into liquid funds. Now, i dont need this money for at least next 3-4 years. Few dilemmas that i have ::

1. Should i leave the money in liquid funds till market corrects and get 100% equity allocation thereafter again, my risk appetite allows that.

2. Should i put 10-20% into debt instrument for now and move to equity later. If yes, then FMP or MIP??

3. Should i do a STP for 3-4 months directly into equity right now, since people are expecting correction by year end or so, albeit, i am not sure about this.


Pls recommend.

3 replies on this article “Debt Investment at this juncture”

  1. jitendra solanki says:

    Hi Sumit,

    IF you are looking at equity funds with 3-4 yesr horizon then invest in phases at this juncture.Invest in Liquid fund and do a STP in equity Funds.

    Alternatively, Some portion invest in short term debt funds and MIPs.Both are good options.

    Keep investing in equity for this time period.Market level is not too dangerous to invest.Its just that you do an averaging to minimize your risk.

  2. Sumit

    You can do a STP for next 6 months for 75% of your funds in debt funds , make sure you dont have any exit load in equity funds . After markets cools off in 1-1.5 yrs and is at very low point , you should then divert it back to equity with strong heart 🙂 .


    1. Sumit says:

      Thanks manish for your reply.

      I have never been on such high debt allocation. Is the market level so dangerous to go upto 75% debt allocation. Since i have 3-4 years horizon, i feel i may miss out on equity gains. What do u say…

      Also, which debt u recommend :: FMP or MIP or any other??



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