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Mutual Funds: Hemant Rustagi

Business Standard 

Today, Hemant Rustagi, CEO of Wiseinvest Advisors, answers your questions

Is this the right time to revisit one's portfolio? The markets are moving up and we are expecting a stable government. My goals haven't changed, though. How do you rejig a portfolio?

The pre-election rally in the stock market has taken benchmark indices to an all-time high. Besides, there has been a significant improvement in macro numbers such as the current account deficit and fiscal deficit. As foreign inflows are expected to remain strong, the market is likely to continue its good show.

However, there is a need to exercise caution and follow the asset allocation strategy based on your time horizon and risk profile, rather than investing randomly. This process needs to be followed irrespective of whether one is investing in a rising, falling or volatile market. Similarly, it might not be wise to exit from the markets in a hurry. Especially if you are sure about your holding period and have been investing systematically. Moreover, the portfolio should be reviewed on an ongoing basis, rather than being an event-driven process.

I don't have exposure to gold in my portfolio. Is this the right time to invest in it?

Timing your investment for any asset class is not smart. However, there is definitely a case for including gold in the portfolio, as it has a negative correlation with the other preferred asset classes like equity. Another major advantage of investing in gold is that it does not carry a credit risk. Of course, one faces the risk of price fluctuations, which can be tackled by investing systematically, as well as by choosing the right way to invest in gold. Ideally, the exposure should be around 10 per cent of your portfolio. Besides, it will be prudent to buy paper gold through either gold exchange-traded fund or a gold savings funds, as these are simple, secure and tax-efficient methods.

I have invested in two large-cap mutual fund schemes for three years. But I have not made any profit on these. Should I exit?

Time commitment is a key ingredient for investing in equities. That's why it always helps if you align your investment in equity funds to your long-term goals. Although making regular investments helps a great deal in tackling volatility, there can be periods of subdued returns. However, the right way to measure performance would to compare it with the returns offered by the benchmark of these equity funds, as well as the peer group, rather than looking at absolute return alone. If these funds have done well on a comparative basis, you should not get disappointed. The right way to proceed from here would be to assign a time horizon to these investments and continue the process of investment this way.

The views expressed are the expert's own. Send your queries to

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First Published: Sun, April 13 2014. 23:04 IST