As of now I am investing in 2 sip small cap each one corresponds to amount Rs2500[Totally 5k].
I am planning to stop one sip and investing in one quality stock like asian paints,TCS etc on a monthly basis.
My investement duration is long.
Is it good or right decision to invest in one quality stock on each month at higher valuation by stopping one SIP.
My worry is these quality stocks are keep on increasing and i do not know when they will be avilable for lesser valuation
The coronavirus pandemic has taught the investors the importance of diversification of assets. Putting all eggs in one basket is a sure-shot recipe for failure. Diversification strategy is vital to spread risk. The investors should park their money in different proportions – equities, bonds, gold, and other assets.The best portfolios are those with well-thought-out asset allocation and investment plans.For those investors, who have included multiple mutual funds in their portfolio in the present scenario has an opportunity to eliminate those funds that have underperformed and look for those funds, with a long-term performance track record.
Risk tolerance is an important factor to choose between (Systematic Investment Plan) SIP and Stock investment. If you have excessive surplus money and can take up high levels of risk, you can directly invest in stocks.
To make sure you make profits at a considerable scale, you can diversify your portfolio and invest in different sectors. By timing the market right and ensuring the effective use of the stop-loss order strategy, you can strike the best price and execute the buy or sell order. Also, you have to acquire good knowledge and gain relative experience to crack the stock market for the right pick.
On the other hand, if you cannot take up high risks and have a limited amount of money to invest, mutual funds are ideal. It is a fund made by a pool of money collected from many investors with a common objective. The fund will be invested in the stock market to purchase different securities. However, the fund will be managed by an Asset Management Company, and it is extremely safe. You can start investing in mutual funds through the SIP.
It is a method by which you can invest in a mutual fund with a small amount regularly, either monthly or annually. It is very safe and can provide good returns in the long term.
Thanks. More than a detailed analysis of this topic.