Nifty 50 surpasses 23,000 mark; diversified funds recommended

The Nifty 50 index has crossed the 23,000 mark again, after a month away. This rise comes as mutual fund experts share their advice for investors. Suresh Soni, CEO of Baroda BNP Paribas Asset Management, recommends large-cap, mid-cap, multi-cap, and flexi-cap funds for long-term wealth. These funds offer a mix of investments, which can help reduce the impact of market ups and downs. Investors should consider these funds if they can tolerate some volatility in the equity market. Soni also suggests hybrid equity schemes or balanced advantage funds for those who want a stable core of equity holdings. For a safer strategy, a diversified portfolio with different asset classes is preferable. Vishal Dhawan, from Plan Ahead Wealth Advisors, points out that large-cap and banking segments look attractive for lump-sum investments. However, he warns that mid and small-cap stocks may be overpriced. For those not ready for lump-sum investments, he recommends using SIPs (Systematic Investment Plans) or STPs (Systematic Transfer Plans). The Nifty 50 index has risen by 2.27% in the last three trading sessions and by 1.94% in the past week. Despite this recovery, the index is down 4.35% over the last three months due to weak quarterly results and shifts in foreign investments. Experts suggest that now might be a good time to book profits or reduce holdings in mid- and small-cap stocks, as their valuations are still high. Dhawan encourages investors to stay invested in large caps, which are now more reasonably priced. He adds that passive funds in the Nifty 50 are worth considering. For sector-specific investments, banking and financial services are seen as promising due to favorable conditions from recent government budget measures. Rajesh Minocha, a financial planner, suggests that SIPs and STPs should continue, and those with a long investment horizon might consider partial lump-sum investments. After a significant market correction, current valuations may present good opportunities, but investors should be patient as the market could face further declines. He advises moderating return expectations to around 11-13% for new investors.