Invest in Mutual fund sip OR Shares for 3-5 years

POSTED BY GYDPrasad ON March 29, 2012 9:39 pm COMMENTS (6)


I need some suggestions.

I want to invest 3000/- every month for 3 – 5 years. I will increase the fund when i get hiked.

1. Which is the best option invest in Mutual Fund SIP. Like HDFC Top 200, HDFC Capital fund,..etc…

2. Invest in shares , i am suppose to buy the Colgate, ITC, TATA MOTORS etc..which comes with 3000/- every month.

I seen above share given best returns from past 10 years.

i want your suggestions please..


6 replies on this article “Invest in Mutual fund sip OR Shares for 3-5 years”

  1. BanyanFA says:

    Hi Mr. Prasad,
    Definitely invest into shares, if 3K per month is not a material amount of your monthly saving. However, if it is a material amount – you would want to diversify your share holdings and I am afraid 3K per month won’t acheive a good diversification for you. Take for example, you can buy around 10-15 shares of Tata Motors for 3K or just 4-5 shares of any other blue chip or just 1 share of Infosys. What would happen if the sector in which you invested in goes down the drain for next 3-5 years ? If you could have invested around 30-50K per month, shares may have sounded good.

    Hence a better choice is MFs. Invest 1K each in three different types of MF via SIP.
    1/3 into a blue chip – such as HDFC Top 200, BSL Frontline;
    1/3 into midcap – such as HDFC MidCap, ICICI Discovery;
    1/3 into small cap – such as DSP BR – Micro cap fund.


    1. GYDPrasad says:

      Sure, thanks for your advices.

  2. GYDPrasad says:


    Apart from MF and shares, is there any thing else we can invest.

    1. Dear GYDPrasad, MFs itself provide sufficient diversification. You can invest in 3 different asset class Eq. Debt & Gold though MFs. Apart from MF & shares, you have the option to invest in Bnak FDs, RDs, PF, PPF, Post Office Small saving schemes. Company deposits, NCDs………….



  3. Diversification is the key, when you invest in your money in stocks. Its is mutual funds that wil give you the required exposure. Exposing to 3 to 5 socks is High risk/High reward style.

    If one of the stocks fail, or example : if one of the stocks you hold are like satyam, GTL, etc
    you are gone. …..

    Invest only via MF. Yes for the sake of experience you want to invest a bit of your money in stocks, go ahead and try

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