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Keeping all eggs in one basket

Author: Col. Sanjeev Govila(Retd)/Wednesday, October 3, 2018/Categories: Ask the Finapolis

Keeping all eggs in one basket

I have invested in a SIP and realized a sum of Rs 5 lakh? I don’t need this money now. I want to reinvest, but don’t want to keep all eggs in one basket. What are the options available?

Radhika Kumar, Bengaluru

From your question, it seems that you invested in a Systematic Investment Plan (SIP) of a Mutual Fund (MF) scheme and have stopped it now and taken out the amount accumulated. Actually, if you did not need the money, you should not have taken it out, in the first place. As far as your fear of not keeping ‘all eggs in one basket’ is concerned, please note that MFs are the most diversified investments you can have. If you had invested in a pure equity fund, even then your each SIP instalment and the already-accumulated money would have got distributed in typically 25-60 stocks. If the investment had been in a hybrid (or erstwhile Balanced) fund, then large number of debt (ie, fixed income) instruments would also have come in. So, I would say that your fears are unfounded!

Coming to the question of where to invest now, my sincere suggestion is to go back to the mutual funds. If you wish to invest into equity funds (…. equity funds invest in stock markets), use the STP (Systematic Transfer Plan) to slowly invest this money into equity funds to ride over market volatilities. In Hybrid funds, STPs could be shorter while you can invest into Debt MFs directly. If confused or unsure, take the help of a good financial planner. And you should restart the SIPs too!

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Col. Sanjeev Govila(Retd)
Col. Sanjeev Govila(Retd)

Col. Sanjeev Govila(Retd)

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