I had invested Rs 30,000 in an arbitrage fund in March last year. I have earned decent returns. Should I continue with this investment or redeem it?
In case you are happy with the returns on your investments, why would you want to redeem your investments, unless you have a requirement for the funds?
Should individuals ape FIIs’ investment pattern in the Indian market? A friend suggested, saying we could pocket huge gains. Is that right? How will I know where FIIs are investing?
Blindly aping anyone is not healthy for your investments, since they could also go wrong. While it is good to keep track of what institutional investors are putting buy/sell calls on, this should just be used as a guideline to cross-check against your own research. It is your hard-earned money that you are investing and should be done on the basis of your own hard work in terms of research. In case you feel you do not possess the expertise or cannot spare the time for that, you can entrust your investments to professional fund/portfolio managers.
Is this the right time to invest in contra funds? What are the contra themes playing right now?
Contra funds generally invest in certain sectors that are out of favour with the markets, in order to gain from their value proposition, as well as in expectation of their coming back in favour. Therefore, investing in contra funds is not about the right time, but about whether you believe in the concept or not. At present, I would assume contra funds would be investing in sectors such as metals, infrastructure, capital goods, etc, though I have not seen their portfolios.
Stock exchanges list our illiquid stocks every quarter. What does it mean for investors of these stocks? Should they exit the stocks?
Stock exchanges come out with a monthly list of illiquid stocks to inform investors that these stocks have very less liquidity and low trading volumes and that they should be aware of this before making any investment decisions, since such less liquidity could possibly make them susceptible to price manipulations. This list does not cast any shadow on the quality or fundamentals of the company in question, and therefore you should not think about exiting such stocks only on the ground that these are included in the illiquid list of the exchanges. However, in case you do decide to exit such stocks, you should do proper research on this and should also be aware that you may take time to sell your investments, given the low liquidity in such stocks.
How important is it to have gold in the portfolio? How does it help?
In a diversified investment portfolio, all asset classes should preferably be present, albeit in different percentages, depending upon one’s age, life stage and risk profile. Gold is one such asset which should also be present in one’s portfolio. Gold is a measure of value and a safe haven investment in times of economic uncertainty. It should ideally provide returns equal to or higher than inflation, apart from the emotional aspect of owning gold. Therefore, one should allocate a certain portion of their investment portfolio to gold.
The views expressed are the expert’s own. Send your queries to yourmoney@bsmail.in
Today, Dalmia Securities Chief Executive Officer Rishi Nathany answers your questions
