Investing in mutual fund

POSTED BY Renju Mathew ON October 14, 2011 12:55 pm COMMENTS (2)

I am, aged 32, all set to invest 1 L every year (me and my wife together) in mutual funds. We plan for a long term investment keeping retirement in mind, 20-25 years after. What kind of funds are recommended?

Also I plan to invest an amount of 20 K annual for 20 years for children.

I am not looking at short term goals at all. How tax savings funds are (tax benefits on investments) different from balanced funds/diversified equtiy funds? Tax savings is not a priority at all as home loans and PPF will do it to some extend.

Suggestions highly appreciated.

2 replies on this article “Investing in mutual fund”

  1. Dominic Prakash says:
    October 18, 2011 at 5:30 pm

    I would suggest:

    1. Fidelity Equity
    2. HDFC Prudence
    3. IDFC Premier
    4. Franklin Bluechip

    Reply
  2. moneysights.com says:
    October 14, 2011 at 3:04 pm

    Hi Renju,

    Its great to know that you are planning your long-term goals & rightly choosing MFs as a way to achieve them.

    Coming to your query no. 2 – Tax saving funds are essentially equity funds which almost entirely invest all the corpus in direct equity. The advantage as you already know is its helps saves tax while the disadvantage (if at all) would be the 3-year lock-in. While they have given good returns, but if you are already done with your 1 lakh limit, then you don’t really need to look at this. Unless you want an “artificial” lock-in for staying disciplined towards investments.

    Coming to your query no. 1 –
    For retirement – since you are saying, you cam invest for 20-25 years, you can actually choose to allocate your savings in ratio of 80% to Equity (or maybe even 100% if your risk appetite permits you) while the rest can go to debt for initial 10 years after which you can start re-balancing the allocation towards more & more debt . The same allocation pattern can be followed for your child education goal.

    If you are yet to zero-down on your schemes & their respective %age allocation, this link on moneysights would definitely help you – https://www.moneysights.com/tax-planning/non-tax-saving-recommendation

    You can enter Rs. 8,000 as your amount and see the recos for the same. Rs. 8,000 because we recommend investing monthly to our customers. Also, you may want to try moneysights for investing in the chosen Mutual Fund schemes directly online via SIPs or lumpsum. i can promise you we have the simplest way to open an account, make investments, track as well as manage them 🙂

    Let me know if you need any info as well.

    Thanks!
    —
    Santosh Navlani | moneysights.com | making investing simple

    Reply

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