Investment Planning

mid-cap stocks fit the portfolio of an investor willing to take some risk. Ignoring this aspect would mean a mismatch between the fund and the investor’s profile.

If your ELSS investment made in the past is about to mature in the next 3-6 months, you need to decide carefully. Once you complete three years in an ELSS, review your investment. After all, one of your objectives (the tax deduction) has been met. Tax laws don’t allow a rollover for claiming the Section 80C benefitâ€"they insist on fresh investments. Hence, evaluate your “matured” ELSS investment as a normal equity investmentâ€"your decision to stay on or exit should be based on your perception of the market and the need for funds. You may reinvest proceeds in any other ELSS schemes. If there is a need for funds, you could liquidate some or all units. Remember, even partial units can be redeemed. However, if no such need exists, you may better postpone liquidation to few more months.

It is imperative to take advantage of equities to tackle inflation in the long run. An equity MF fits the bill as they come with a number of options to choose from. Volatility in the stock market will help generate wealth in the long run while tax benefit on returns can give your investment portfolio the much-needed edge. Therefore, take the MF route to meet your goals and say bye to tax worries!

  • Market Overview by
    Mr. Navneet Munot,
    CIO, SBI Mutual Fund