Where to reinvest the profit booked from mutual funds?

POSTED BY kaps ON April 16, 2014 8:17 pm COMMENTS (5)

Hi Manish

your site is one in class apart … excellent job!!

I have just redeemed few mutual funds by booking good profits & was wondering where should I re-invest the amount. Can you please advice on such cases where the person has made profit & wishes to re-invest.

Thanks

Kaps

5 replies on this article “Where to reinvest the profit booked from mutual funds?”

  1. Justgrowmymoney says:

    Kaps – We just wanted to know the intent for booking profits.

    Booking profits invariably have the following reasons:

    1) For expenses – whether a financial goal has been met or not
    Action: Use the proceeds for the expense

    2) Portfolio rebalancing:
    Action: Sold equity moves to Debt

    3) Profit targets achieved:
    Action: Park in Liquid funds immediately while deciding how to utilize the proceeds. PPF is a good long term investment for almost everyone and can be looked. When individual stocks are sold there can be a reasoning that the stock has reached over priced levels and someone wants to book profits and move to another stock. I don’t see such a reasoning for Mutual Funds. Hence invariably sold Equity moves to Debt in some form or must be spent.

  2. ashalanshu says:

    Dear Kaps, your choice, not to answer my counter queries. I respect that. By the way, if profit booking was sole motive and market is already above your profit booking point, there is no point in reinvesting now for you.

    Thanks

    Ashal

  3. ashalanshu says:

    Dear Kaps, why did you redeem? Why did you not ask before redeeming? Why are you asking now? What ‘ll you say, If someone say, you took a wrong step by redeeming now?

    Please answer.

    Thanks

    Ashal

    1. kaps says:

      that was not my question…you have not understood my query..anyways thanks

  4. Viren Phansalkar says:

    This would depend upon the intention of redeeming.

    If it was redeemed for portfolio balancing then, it should go in debt products.
    If it was redeemed just because market was up and you could invest later in same MFs at lower price, then you have to wait till the market comes down (difficult to guess when)

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