Where and how much to invest in mutual funds, experts speak

Disclaimer: This story is for informational purposes only and should not be taken as investment advice.

It’s the first Friday in the new year and as this first week comes to a close here’s a thing or two to ponder about investment decisions over the weekend. Once the basics of investing have been mapped out like planning financial goals and studying market trends, the ‘where’ and ‘how much to invest' can be addressed.

Financial goals are an integral part of investing money into various schemes. Setting aside a life or financial goal can often be motivational for higher investments.

Goals can be defined as anything from buying a house, to getting married or even planning for retirement.

Do keep in mind funds and the allocation of money to each is decided after careful consideration of individual investors. The individual should state his or her risk appetite and the time period for which the investments should be locked-in or if they would like a liquid investment.

“If you want to invest for short-term goals, you may stick to bank deposits and debt mutual funds. If you are investing for long-term, you can consider investing in equity mutual funds. Based on you risk profile, you can fine tune your options,” a report by ET Mutual Funds said.

A call to Zeebiz Mutual Funds Helpline by a 32-year old investor said he would like to grow his investments to Rs 50 lakh in 10 years for his children’s education.

The investor had started five SIP investments.

“For a goal of Rs 50 lakh in 10 years, the investor will have to set aside Rs 22,000 on a monthly basis. For a goal of Rs 2 crore in 20 years, he will have to invest Rs 20,000 (separately) per month. RS 42,000 per month in investments will be required to meet your financial goals,” Shweta Jain, certified financial planner, said.

The investor’s current funds were listed as follows.

ABSL Small and Midcap, ABSL Balanced 95, L&T Emerging Business, SBI Blue Chip, Kotak Select Focus. To which the expert said it was a ‘balanced portfolio’ that did not require many changes.

“There are five schemes that the investor has ventured into. They look alright for now however, if the investor wants to increase his investments then increase it in the same schemes. Do not add more schemes.

“L&T Emerging Business is a good scheme,” Jain added.

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