Investing: Rishi Nathany

After the US downgrade, markets are falling. I am looking to park Rs 8 lakh. Is this a good time to enter the market? Which sectors are good bets? My horizon is 2-3 years.
It is not possible to predict market peaks and lows. However, this is a good time to add to your portfolio. Invest say Rs 1 lakh monthly, for the next few months, in quality stocks beaten down recently. Instead of looking at sectors, a bottom-up approach is better. However, if you are keen on them, adopt a contrarian approach, i.e. buy rate-sensitive sectors, since they will benefit from the rate cycle peaking out, and possibly reversing in a few years.

I, 25, started investing last week in mutual fund via systematic investment plan (SIP). Its focus is on banking and financial services. The value of my first investment has eroded by 40 per cent in less than a week. Is it a good idea to continue with this investment? I am planning to invest in more funds. Which funds should I choose? How should I divide my investment amount of Rs 10,000 across the chosen funds?
Investing in a sector can be more volatile than investing in an equity-diversified fund. A banking sector fund, however, should not have resulted in 40 per cent loss, despite the fall in the markets. You should seriously review your investment. You could look at investing in diversified equity funds. And, in case you have a higher risk appetite, invest partly in mid-cap funds, since they could deliver superior returns over the long-term. Ideally, I would prefer to stick to funds with a proven track record. You could, therefore, divide your monthly SIPs across two to four funds.

The writer is director, Touchstone Wealth