A value fund replaces over-valued stocks by those that are trading at a discount, which will not be evident from its NAV

You can practice value investing by buying a fund with a 'value oriented' mandate. ICICI Pru Value Discovery, Birla Pure Value, UTI Dividend Yield, Templeton India Equity Income Fund are a few good value funds in the market. It is possible for a fund's portfolio to be made up of value stocks, even after the fund's NAV has appreciated strongly. Remember that unlike an individual stock, where the valuation keeps rising as markets rise, a fund's portfolio does undergo changes with market movements. If a fund is positioned as a value fund, the fund manager will replace over valued stocks with those trading at a discount to the market as prices rise.

Gold is not an ideal form of investment as it yields no regular returns. Bonds or fixed income should be your first diversifier from equities. If you would like to own gold, buy it in ETF form and restrict it to 5 per cent or so of your portfolio.