Do I have to tell you where I heard this advice? ….so here it is:
1. If you are not confident, keep your money in cash: ‘Cash is king’ goes the argument.
If cash is king what is inflation? I think sitting on cash till the market improves is an amazingly stupid piece of advice.
2. When in doubt invest in large cap funds:
if everybody did that, will not yield expectations come down?
3 Do a SIP in a large cap fund, if in doubt choose an Index fund:
this is not a bad advice at all, except that he also added…in ONE year you will see a 20 to 30% return. I am not sure of that part. Also why the hell should they build such high expectations for the poor investor? He may get 20% but in the past he has been hurt so much that he may not stay beyond 15%.
My take is simple…see the performance of equities over the past 4-8 years, and decide on a fund house scheme. Look for a scheme with a large corpus. A flexicap fund makes sense…if you are still in doubt choose a fund with about 30% in debt and the balance in equity. Such a fund scheme will surely fluctuate less…and may calm your nerves..
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