Can I invest in the schemes my relative is investing?

My relative invests in Aditya Birla Sun Life Small & Midcap Fund (Growth) and IDFC Sterling Equity Fund (Growth). He is recommending these funds to me. My age is 30. If I can, I will invest Rs 1,000 in each of these funds. Please give your suggestions.

--தமிழின்ப சீனிவாசன்

What works for your relative or friend need not work for you. You should choose your investments based on your life goals, investment period and risk tolerance. Tips from friends and relatives would not include for these factors. They might have used certain parameters while choosing those investments, but those parameters need not suit you.

For example, your relative is happy with midcap and smallcap schemes because he has a very high risk tolerance. But that need not be the case with you. If you are a conservative investor or an investor with a moderate risk appetite, these schemes would not suit you as they are extremely risky and can be very volatile. Conservative investors often tend to get scared by the volatility in the market and they sell their investments or abandon them when they see their investments lose value significantly.


Do not invest on the basis of tips from someone. If you do not know much about investing in mutual funds, you may seek the help of a professional mutual fund advisor or a financial planner. A professional would be able to offer personalised advise that will help you to achieve your various financial goals in life.