by Mr. Suresh Parthasarathy,
CFP, Chennai
I conducted 10 Investor Awareness Programmes across Tamil
Nadu in the past 2 months.
In most of the meetings, investors said they wanted to
sell their large-cap mutual funds because they have underperformed mid- and small-cap schemes by a good margin.
It is indeed a fact that large-cap schemes performed
badly, mainly because of selling by Foreign Institutional Investors (FIIs).
On the other hand, high net-worth investors, or / HNIs,
took risks & bought mid and small cap funds and made money. Several small
investors followed in their footsteps.
But, one has to understand that HNIs have an appetite for
risk (and they can also afford to take such risks).
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| Suresh Parthasarathy, CFP, Chennai. |
More important, they take quick decisions when the tide
changes. Small investors rarely book profits when the thing goes wrong.
So, it is always better to have appropriate allocations
among large ,mid- and small-caps, based on your risk appetite. In general, it
better to restrict exposure to mid and small caps to less than 50% in the
portfolio.
Going forward, my advice to you investors is to invest a
lump sum in large-cap funds and adopt a Systematic Investment Plan, or / SIP,
in mid and small cap funds.
I’m recommending this strategy based on the experience of
the past years.
In the past 15 years, foreign investors moved out of the
market five times (in 1998, 2001, [the terror attacks on the Twin Towers and
elsewhere in the US], 2008, 2011 & 2015.
In these years, the FIIs sold and moved out of the
market. In the other years, NIIFTY and SENSEX delivered good returns. (The
attached table gives more information.)
Remember what investment guru Mr. Robert Arnott said:
“In investing, what is comfortable is rarely profitable.”
With Regards,
Suresh Parthasarathy,
See what i am tweeting :@parthasuresh.
Suresh Parthasarathy,
Registered Investment Advisor,(SEBI),
Columnist,
Founder,Myassetsconsolidation.
Mobile 98404 54737
| Skype: | suresh.partha |
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