Investors should be cautious

NEW DELHI: Money managers are advisingretail investors to be cautious and not get too excited with Sensex scaling6,000 points. Investors can make money but should go with proper advice, sayfinancial planners.‘‘It is good to keep your excitementdown when there is a boom or a crash,’’ says Alok Vajpeyi, presidentDSP Merill Lynch Fund Mangers. ‘‘But it’s time for retailinvestors to keep some portion of their savings inequity.’’Equity-mutual funds have offered solid returnsin the current rally. The average domestic equity linked fund has given a returnof over 150 per cent in the last one year. Should investors bank on the strongperformance? ‘‘I expect a correction. But investors with a focussedtime horizon of three years can get the best in the currentscenario,’’ says a Mumbai-based fund manager.Whereshould you put your money? Bajaj Capitals suggest Monthly Income Plan.‘‘There is a resurgence in MIPs. They have given an average 20 percent return,’’ says Rajiv Bajaj, MD BajajCapitals.‘‘Market is still looking risky. We areadvising people to book a profit of 20 per cent and ask them to exit afterachieving it,’’ says Bajaj. Mindset of small investors have changed.They are taking money from savings accounts or FDs and putting in equities inthe last six months.‘‘If you have a portfolio of 30 percent in equity and 70 per cent in debt or bonds it is time to reorganise.Increase the equity portion to 40 per cent to get the realbenefit,’’ advises Himanshu Kohli, Client Associates, a specialisedwealth management firm. Kohli added that whatever earned from equity should berebalanced and invested back into debts or the Reserve Bank of India bonds.