Iam 34 years old. I have invested by SIP in HDFC large and midcap fund, HDFC Nifty 50 index fund and Sundaram flexi cap fund each Rs. 2500. I can invest another 7500 monthly.Can you suggest how to go about it.

Ans: It's excellent that you're proactively investing through SIPs, which is a prudent approach to building wealth over time. Let's explore how you can further allocate your additional investment of Rs. 7500 per month:
1. Diversification: Since you already have exposure to large and mid-cap stocks through HDFC Large and Midcap Fund, and to the Nifty 50 index through HDFC Nifty 50 Index Fund, you may consider diversifying into other market segments or asset classes to spread risk.
2. Consider Small-cap or Sectoral Funds: To enhance diversification, you could allocate a portion of your additional investment to a small-cap fund or a sectoral fund. Small-cap funds have the potential for high growth but come with higher risk, so ensure it aligns with your risk tolerance. Sectoral funds invest in specific sectors like technology, healthcare, or banking, offering focused exposure to particular segments of the market.
3. International Exposure: Another option is to consider investing in an international fund to diversify geographically. International funds provide exposure to global markets, offering opportunities for growth and diversification beyond domestic equities. This can help reduce portfolio risk through exposure to different economies and currencies.
4. Debt Funds for Stability: Depending on your risk profile and investment goals, you might also consider allocating a portion of your additional investment to debt funds for stability. Debt funds invest in fixed-income securities like bonds and offer lower volatility compared to equity funds. They can serve as a cushion during market downturns while providing steady income.
5. Review and Rebalance: Regularly review your investment portfolio to ensure it remains aligned with your financial goals and risk tolerance. Rebalance your portfolio if necessary by adjusting your asset allocation based on changing market conditions or personal circumstances.
By diversifying your portfolio across different asset classes and market segments, you can mitigate risk while potentially enhancing returns over the long term. Consider consulting with a Certified Financial Planner to tailor an investment strategy that aligns with your specific financial objectives and risk profile.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in