September 25, 2010 8:56 am
Is it advisable to exit a performing fund if it has given a reasonable yield (say 20-30%) and move on to another good fund. or to hold it for long-term?
Yes , it would be a good idea to not touch things and let it compound .
If you have a long term goal. Letting the money to compound is good option and to continue with the SIP. And when your goal is near say in 3-5 years and if stock is going on a Bull,i would say we should book partial profit and take them to conservative investments like bond/FD.
Partial Profit booking is essential and serves to reduce the risk factor.
If you’ve invested for above 1 year & sitting on good profit, shift some profit to liquid fund or floating rate fund. DO NOT STOP YOUR SIP. Shift that money back to equity when market falls.
There is no point in shifting from your good scheme to some other scheme if market is moving upward.
Well depends on your goals actually. If you need money you may withdraw upto extent of profit earned and continue to invest the balance amount. Continue with SIP as that will generate good returns over a longer period of time. Incase if the market corrects by say 300-400 points in a day you may invest small amounts in lumpsum.
Why break the compounding effect if you don’t require the money… and if you want to put the redeemed money in another good fund …. how does it really serve the purpose as your existing fund is also performing well.
Disclaimer: I am no expert just i think this is the gist of what I have been learning about in the Personal finance space
Thanks Kavita 🙂
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