How Many Mutual Funds Is Too Many? 🤯💰
Heyyy
I hope you’re doing well now that the whole Coldplay-Ed Sheeran concert fever has died down and you probably have less FOMO! Speaking of less, tell me:
What I was up to: In the midst of getting our website live and shooting for content and our podcast, it was my son’s birthday so I took a super quick 2-day trip with the fam to look at animals because he’s just obsessed!
I had the chance to talk to Priti Rathi Gupta, the visionary founder of LXME. She offered great insights, and empowering advice for women in business, the importance of taking control of our financial futures and so much more! Watch here:
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Market ka haal: The Indian stock market was in a mood and under pressure last week, with Nifty down 0.16% and Sensex slipping 0.26% 📉. Weak corporate earnings and relentless FII sell-offs ($25B and counting) kept sentiment shaky. HDFC Bank fell 2.1%, dragging the indices, while Maruti Suzuki dropped 2% after scaling back its EV plans. High valuations and slowing earnings are keeping investors cautious, despite optimism in private banks, IT, and pharma.
Near-term volatility isn’t going anywhere. Until there’s a shift in global sentiment or a solid earnings turnaround, it’s a game of patience. Smart investors aren’t panicking—they’re positioning. Because if history tells us anything, the best opportunities come when the market looks tired. 🧐📊
Humara Gyaan: Mutual funds are amazing…until you end up with a portfolio that looks like a buffet plate piled with everything on the spread because you couldn't decide. More isn’t always better, so, how many should you have? Read on to find out!
1️⃣ 6-8 Funds Is Your Sweet Spot 🍬
For an equity mutual fund portfolio, your ideal range could be 6-8 funds. That gives you:
✅ Diversification: Ensure you have a mix of large-cap, mid-cap, small-cap, and multi-cap funds to cover all bases.
✅ Better Management: Too many funds = too much tracking. You don’t want your portfolio to be chaotic and inefficient to follow.
2️⃣ Where should you start?🚀
If you’re a beginner, 2-4 mutual funds are enough to get going. You can consider a mix of:
🔹 One large-cap fund (for stability)
🔹 One mid or small-cap fund (for higher growth potential)
🔹 One flexi-cap or multi-cap fund (to balance things out)
🔹 One index fund (this is optional, btw, for passive investing)
3️⃣ What About 10+ Funds? Is That Too Much? 🤔
If you have a larger portfolio, you can go up to 10-12 funds, but only if it makes sense, and you have the time/dexterity to track them closely. The moment you start adding funds just for the sake of it, you’re probably over-diversifying. You don’t need five different mid-cap funds! Many funds invest in the same stocks. So, holding 15 funds doesn’t mean 15x diversification—it just means repetition which is quite counter-productive!
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Your investments, like your time, should be intentional. You wouldn’t use ten knives to chop one onion, so why overload your portfolio with funds that do the same job? Too much of anything, even diversification, will only dilute impact. Like all sharks advice founders who pitch to them, focus! Refine, and remove the excess. Because in both money and life, clarity beats clutter every time.
Here’s to intention and structure🍻
Niyati❤️
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