INVESTING: Rishi Nathany

If I want to add a sector fund to my portfolio. Which one should I opt for out of pharma, FMCG and infrastructure? A friend said infrastructure was a good bet, as funds in this sector had underperformed in the past. However, the future of the sector is bright and funds in the sector are more diversified compared to other sector funds. Pharma and FMCG, on the other hand, have performed consistently over the long term. Both are stable sectors.
Both FMCG and pharma are defensive sectors, while infrastructure is a growth sector. Therefore, FMCG and pharma stocks might deliver decent returns over the long term with lower volatility, and infrastructure might give superior returns, albeit with higher interim volatility. Your decision to invest will depend on your time horizon, risk profile and the present composition of your portfolio.

Experts say the stock market will see more corrections. I have Rs 2 lakh in cash that I want to invest in the market. I know timing the market is not advised. However, when corrections are imminent, wouldn’t it make sense to wait for some more time?
It is verily impossible to time the market. While a desire of an investor to buy at lower levels is understandable, at the same time, there is an anxiety on being left out in case the markets don’t correct in the near term and see a higher trend. I suggest you stagger your investments into a few parts, and invest systematically over a time period you are comfortable with. You might be able to get a good average investment price at maturity.

I have just started investing. At present, I buy and sell stocks through BSE. If I want to shift to NSE. Will there be any additional formalities? Do I need a separate demat account for trading in NSE?
While there will be additional formalities, you don’t necessarily require a separate demat account. You will need to find a broker who is a member of NSE and execute a client registration form along with other necessary documentation, like you did with your BSE broker. While executing such documents, go through them carefully, strike out any blanks and opt only for segments you wish to trade in.

The writer is the director of Touchstone Wealth. Send your queries to yourmoney@bsmail.in