Should I invest the lump sum now as the market is at very high level

Currently I invest in 3 Mutual Funds with a SIP (monthly) of Rs. 1,000 each. These are - ICICI Value Discovery Fund (Regular), Reliance Tax Saver ELSS Fund (Regular), and Mirae Asset Emerging Bluechip Fund (Direct). All are for long-term, say 15 - 20 - 25 years. Now, I would like to invest a lump sum of Rs. 50,000 or 25,000 + 25,000 in one or two of them. Which of them will be the perfect option. If so, is it the right time to invest a lump sum in any fund, because market, at this moment, is highly performing with Sensex reaching 30,000 mark? And, if I invest a lump sum in any fund, what will be the perfect time period to do so (I mean - 5 years, 10 years, etc.)? I await your valuable reply?

Apr 27, 2017 by Saptak Ghosh, Delhi  |   Mutual Fund

You have selected good funds for your current SIPs and you can expect good return as your investment horizon is quite long.

With regards to your lump sum investment of Rs 50,000 or 25,000 x two funds, you can invest in diversified equity funds. You are already investing in one diversified equity fund. i.e. ICICI Prudential Value Discovery Fund. The other could be Birla Sun Life Advantage Fund.

Please note that even though the markets are at all time high, it is impossible to guess if it would not rise further or go down from here. If you recall the year 2008 when the market corrected sharply, one who could keep patience got rewarded hugely as the market went up and touched new high within couple of years

The point we are trying to drive here is that you cannot time the market, therefore, if you are investing for next 5-10 years, then you can straightaway invest the lump sum amount. However, if you are in doubt, you can take the STP route - invest the lump sum in liquid funds and transfer a fixed amount weekly to equity fund. But remember, if the market keep rising your cost of acquisition of equity funds may be higher as you will be buying units at high levels.

We think, you should focus on your investment objective and invest in lump sum without trying to time the market as your investment horizon is long!

Hope the above helps! Thanks for writing to Advisorkhoj !!

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