Investment suggestions for 2-3 years time horizon

POSTED BY Raj ON April 19, 2012 11:56 am COMMENTS (8)

Hi Everyone,

I plan to buy a house in 2 years. I want to start investing my savings for the down payment. The risk appetite is low for this goal.

I plan to contribute a fixed amount every month and a lump sum once a year during these years.
Given that I am in the 30% tax bracket, based on my research here and elsewhere, I had decided on investing in short term debt funds for 2 years. But with the recent fall in rates, I have been reading articles advising to stay away from short term debt funds.

So which instrument would be the best for me?

8 replies on this article “Investment suggestions for 2-3 years time horizon”

  1. Abhishek Srivastava says:
    June 29, 2012 at 4:58 pm

    Raj,
    For medium term (1-3 years) the options can be
    1.Balanced mutual funds/NRE deposits, and
    2. Fixed maturity plans
    I would you suggest you to take some expert advice on the matter try http://on.fb.me/MX9J1Z

    Reply
  2. Raj says:
    April 20, 2012 at 1:19 pm

    Thanks, Ashal! Looks good to me. I will do some research on it.

    Reply
  3. Raj says:
    April 19, 2012 at 7:46 pm

    Thanks! I was considering liquid funds to park some money lying in the saving account as suggested by some. Would they give better post tax returns compared to FD in 1-2 years?

    Reply
    1. ashal jauhari says:
      April 20, 2012 at 12:39 am

      Dear Raj, considering the situation that RBI has started reducing the interest rates, you may invest in to a Gilt fund.

      Please check the below link & opt from the list.

      http://www.valueresearchonline.com/funds/h2_fund_select.asp?mode=performancelong&mininitinvestment=Any&risk=Any&NetAsset=Any&Type=1&objectivesec=6&returns=R1Year&Percentage=0.1&rating=Any&rating1=1&rating2=2&rating3=3&rating4=4&rating5=5

      Thanks

      Ashal

      Reply
      1. Sachin Kumar Nigam says:
        April 20, 2012 at 2:17 pm

        hi ashal

        gilt funds are vulnerable to interest rate risks. In a 2-3 year time horizon do u see the RBI will keep continuing easing liquidity by cutting interest rates?

        I mean how can u peak into subbaraos mind..:-)

        Reply
        1. ashal jauhari says:
          April 20, 2012 at 4:14 pm

          Dear Sachin, I’m not peaking in to dear Subbaroa’s mind. I’m merely catching the signals in the RBI’s policy since Dec 2011 or even October 2011. Now on wards, the journey of interest rates ‘ll be south wards. Till when it ‘ll remain so, mine guess is as good as yours’.

          Thanks

          Ashal

          Reply
          1. Raj says:
            April 20, 2012 at 6:33 pm

            I think at least the next one year should be a good time for investing in Gilt, no? Nobody expects rates to go up in the next one year.

            Reply
  4. sunny balwani says:
    April 19, 2012 at 6:08 pm

    Raj,
    You can opt for liquid funds as well, check and do some reseach on valueresearchonline site.. as per my info escorts liquid fund is giving good returns time frame 6mnths to 1 yr.
    Regards,
    Sunny

    Reply

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