Many investors build portfolios by investing in multiple mutual funds across categories. At first glance, this approach appears diversified because it spreads investments across different schemes. However, the underlying holdings of those funds may sometimes include the same stocks or securities. This situation is known as mutual fund overlap, and it is more common than […]
A 25-year-old professional investing for retirement and a 60-year-old retiree depending on investment income face very different financial realities. Yet many investors ask the same question: How much risk should you take? It depends on three things: your risk tolerance (how much volatility you can emotionally handle), your risk capacity (how much loss you can […]
Many investors believe that holding multiple mutual funds automatically ensures diversification. At first glance, owning five or six schemes may appear safer than owning one. However, sometimes those funds may be investing in many of the same underlying stocks. This situation is known as portfolio overlap in mutual funds. While it is not always harmful, […]
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