Hello Sreekanth,
I've been following your blog constantly and this is my second question.
I've selected a fund today based on past performance and start a SIP for a year or two.
After 6 months / year, selected fund may not perform or other AMC perform better.
Should I stop the existing fund / AMC and switch to best performing fund? Is it advisable?
There's no guarantee for the new fund / AMC that it can perform for at least another 1 / 2 / 3 years.
How frequently we need to re-balance the portfolio even if the selected fund is not performing great?
Shall I continue to invest in my existing fund till SIP gets completed for at least a year & re balance it ?
Pl let me know your guidance on my query. Thanks in advance for your valuable inputs.
Regards
Mukesh
2 Answers
Hi,
That's why we should take utmost care when creating a mutual fund portfolio. Advisable to stick to the Mutual fund schemes which are consistent performers over long periods of time (15 or 10 years).
Personally I prefer consistent ones to highly ranked or 5 star rating ones.
Once you invest in consistent funds, you may remain invested in them for few years say at lest 2 to 3 years. If you believe that a fund is not up to its past performances, you may switch to other consistent performers.
Besides, returns we also need to track the list of Fund managers who are managing the funds (which are in ones portfolio).
Kindly note that re-balancing is also referred to as Equity Vs debt allocation, depending your investment objectives / risk profile.
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