January 24, 2011 12:53 pm
Need some expert advice. A couple of mutual funds I invested in 2006-2007 are showing returns between 90-110%. Should I still hold them or sell them off and buy new mutual funds.
More than “should I sell my MF” ? you should ask is my asset allocation at right point now ? The face that you money has grown 100% in last 3-4 yrs is good and its a great return , but make sure you are get some taste for it . If you loose the 50% returns , your patience for these 3 yrs will go for a toss .. For i think it this way . You made good investment and now they have given fruits to you , which you should pluck , if you not all , please pluck some . If you leave it on tree expecting them to get more ripe , IT might just get stale !
Atul & Manish,
Thank you for your replies.
I was learning myself regarding profit booking by reading articles and I stumbled upon your reply. I had asked separate query as well in the forum.
Now coming back to your reply, what happens with ‘plucked’ fruits’ if one is not ready to eat it as yet? I agree with you logic of getting stale in the tree, but equally important is one needs good storage when plucked right? What kind of storage you recommend after plucking partly please. Also, will they be beneficial if put again in the soil to grow as a separate tree?
You have not mentioned the fund names, however they look good based on the returns based. However this may not hold true in future.
Please look at the MF current portfolio (lot of churns happening). Analyze the sector wise/company wise exposure. Keeping in mind the RBI increasing rates, increasing inflation, oil price increase please analyze the MF exposure.
If you are need of money immediately then I suggest book profits and reinvest in another set of good MF. If not then book part profits and continue SIP in the same fund.
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