Hello
Once again another common advise which i find bit confusing.
Experts advise to avoid over diversification and better control, one must pick up good 4 to 5 Mutual Funds well diversified among large, mid, multi caps and invest only in them.
Let us say I choose ABC fund performing well since 1990 and start SIP for the next 10 years. As you would quite agree, Fund manager plays a very important role regarding fate of a particular fund. Apart from other factors, it is more of what he thinks, how he churns the stocks etc. Suddenly after 10 years , this ABC fund manager exits.. what happens next? We have seen in many cases (example Magnum Tax Gain), the moment the manager exits, the funds looses its sheen. Now having invested a huge sum in this ABC fund, what should be my option? Withdraw gradually to another performing fund in same category or take it away at one stroke and transfer to another fund.
Wont it be better if we have 10 - 12 funds? That would not allow a big chunk of money in one fund alone but divided among all the 10 - 12 funds. By this way, if one fund fails after X years, it is easy to transfer a smaller sum than a big chunk?
Makes sense.. do reply even if it does not please!! trying to get the basics right
Thanks
Jeet
Once again another common advise which i find bit confusing.
Experts advise to avoid over diversification and better control, one must pick up good 4 to 5 Mutual Funds well diversified among large, mid, multi caps and invest only in them.
Let us say I choose ABC fund performing well since 1990 and start SIP for the next 10 years. As you would quite agree, Fund manager plays a very important role regarding fate of a particular fund. Apart from other factors, it is more of what he thinks, how he churns the stocks etc. Suddenly after 10 years , this ABC fund manager exits.. what happens next? We have seen in many cases (example Magnum Tax Gain), the moment the manager exits, the funds looses its sheen. Now having invested a huge sum in this ABC fund, what should be my option? Withdraw gradually to another performing fund in same category or take it away at one stroke and transfer to another fund.
Wont it be better if we have 10 - 12 funds? That would not allow a big chunk of money in one fund alone but divided among all the 10 - 12 funds. By this way, if one fund fails after X years, it is easy to transfer a smaller sum than a big chunk?
Makes sense.. do reply even if it does not please!! trying to get the basics right
Thanks
Jeet