Most times,we come across investors, who show a great deal of worry towards their performance of their equity funds or equity Mutual Funds. Although the grand total of the entire equity holding may not be of a good value.
For example, if an investor, invests Rs 2 lakh in equity mutual funds, about Rs 50 lakh in fixed deposits, and well above a crore in real estate, he will definitely show a great deal of restlessness if the markets performed a bit poorly.Although the value of his equity holdings in the entire portfolio is of only 1%.
So, such kind of unnecessary emotions will lead to nothing. If you hold such a portfolio, its time you expose yourself to some risk. Take a part of your funds out of the deposits and re invest them in equities of a size able amount of your portfolio.
It is of a great value to understand that the only way to beat the inflation is to raise the standards of stock markets, ie., to invest funds into them. Over the long-term , equity investing is a great defence against inflation and the only easily accessible way to participate in the general growth of the economy. Just by investing in a couple of large-cap equity fund like the index funds are quite enough. You need not try and gain the entire system as to how the markets actually work.
If you want to make a difference to your portfolio and increase the returns in future, its better you link you investments to your financial goals be it repayment of any loan like a home loan in the nest 5-6 years or to buy a car in the next couple years etc can help you increase your portfolio value over a good period of time.