I have been investing in stocks and equity-linked saving schemes (ELSS) since 2015. I do about Rs40,000 in ELSS and Rs50,000 to Rs60,000 in stocks via systematic investment plan (SIP). Should I invest with SIPs in mutual funds or invest in stocks myself? My time frame is 5 years.
—Abhay Jha
It is a little difficult to answer this question without knowing how good you are with picking stocks on your own and managing a portfolio of equities. However, since you have been investing for the past 2 years or so, you would be able to gauge this yourself—please check to see how your stock portfolio has done compared to the average return of diversified mutual funds in this period. For the record, as of this writing, diversified funds returned close to 25% in the last year. If you have managed to hold your own against the performances of mutual funds and you feel confident about your ability to continue doing so, there is nothing wrong with managing your own equity portfolio. However, if you feel you need help or if your performance does not hold up, mutual funds are a safer option.
