This is something that has been bothering me for a while now. I started out investing directly into equities without paying any heed to Mutual Funds. However, time constraints and some foolish mistakes later, i realized that investment in Mutual Funds might be better suited for me.
So, there i went testing the waters and invested in a few NFOs (2 to be precise). I invested in Morgan Stanley Across Capitalization Equity Fund and DSP Blackrock Natural Resources Fund NFOs. I am not sure of the exact dates but i figure both the NFOs came in 2008 and that’s when i invested in them (All i am sure of is that the great stock market crash happened after i invested)
I had been literally out of active investments for a while and had not cared to have a look at my investment portfolio. But i got around having a look at the portfolio and there were those two Mutual Funds sitting right there happily in GREEN. Yes, unlike the stocks i buy the Mutual Funds i was holding were in profit. Jumped with joy is what i did on seeing the % notional profit they are giving me currently. Here is how they stand as of today
See the green box there. Now that is the kind of gain i would happily settle for incase it was any of the stocks i was holding. Heck, i generally fold out at 20% gains most of the times. However, this post is not to showcase my gains in my Mutual Fund portfolio. The post is to ask you as to what should i be doing now with these MFs i am holding.
When Should I Sell? Should I Sell? Should I Buy More? are some of the questions that i have for you.
I initially thought i would apply the simple 20% rule i use in stocks and sell these MFs at the current position. However, there are things making it difficult to apply the same rules including
The amount invested is relatively small. A 40-50% gain on a 10k investment is not something to brag about and plan what to do with the windfall 🙂
I do not really need the money right now (What with 10k anyway). I mean i can live with the money parked in for another year or so
But then again, it kind of irks me that i am not doing anything with it. Yes, it is sitting there without bothering me but is there a call to action i am missing here. Increase the units i am holding, initiate an SIP on these Mutual Funds or exit the existing funds to enter funds which have better growth potential
What would you have done if you were holding these Mutual Funds and were in my position? Is there a benchmark you use for exiting Mutual Funds which might help me understand what to do with my MF Holdings. Please share your opionons