Based on the past experiences here are some tactics and re-balancing tips.
Tactic 1: Book profits
- Book profits and switch from Equity funds to liquid funds in short term.
- Transfer units from liquid funds to Equity funds when market nose dives.
- Set a realistic targets and book profits (even if paying the load is necessary).
Tactic 2: Re-balance portfolio
The new recommendations (unless otherwise stated, all funds are considered to be Growth Plan): Based on August 2009 research.
My suggestion is to hold on to this folio for next 3 years and re-evaluate.
- Large-cap fund: Franklin Bluechip
- Multi-cap: HDFC Top 200, IDFC Premier Equity Plan A, Reliance RSF – Equity
- Blend: HDFC Prudence
- ELSS: HDFC Tax Saver – Dividend Payout ONLY (to avoid getting locked for another 3 years)
- Index: HDFC Index – Sensex Plus
- Liquid: HDFC Cash management Fund
NOTE: All funds performance were evaluated on 5 year performance track period, also considering the slump period of 2007-2008.
My personal choice of portfolio allocation:
Tactic 3: Look into different avenues
- Real-estate is down by at least 20% enter there and stay for few years
- Look for a business opportunity and invest into it, start or become a partner in a venture 🙂
Think big, go small by small; and happy investing.