POSTED BY October 25, 2010 2:21 pm COMMENTS (5)ON
My spouse would like to start her investment with lumpsump investment for 10-15year. she has 50k to invest in MF, could you please give me proper guidance to invest.
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5 replies on this article “lumsump (one time) investment (50K)”
You need to keep things simple. Do not invest in too many funds as the portfolio would become over-diversified & you will not get the required appretiation when one of the funds perform exceptioanlly well. I suggest, you invest the entire 50K in a Liquid or any short-term Debt fund. And then do an monthly SWP into a 2/3 Equity Diversified fund(s) having a Giant / Large cap and Mid Cap exposure. Since your investment horizon is long-term (10-15 yrs) 20-30% in Mid Caps would be nice for your portfolio.
The funds listed by Venkatesh & Santosh are all good funds & I personally have invested in a couple of them (HDFC Tax Saver, Reliance Growth). I suggest you do your own research before investing in MFs. You can visit http://www.valueresearchonline.com – which rates MFs over a host of parameters & assigns a * (star) rating to the funds. You can select best performing funds 5* / 4* funds by comparing their long term returns (over 3 or 5 yrs).
There no single or accurate answer for your question. Investing depends on various factors like person risk taking ability, financial goals etc etc… Here is what I would do if I have lumsum.
It is not good having too many mutual funds of same category in a portfolio. I would buy one of the following funds HDFC Top 200, DSP Top 100, Birla Sunlife Frontline Eq fund or Reliance Regular Savings Equity which are large cap oriented funds and buy IDFC Premier Equity Plan A or sundaram select midcap which are midcap funds. I would invest in Large cap and Midcap funds at 60:40 ratio.
It is not advisable to invest lumsum at any point of time. If you have lumsun, it is good idea to buy Liquid Plus fund with the lumsum that you have and do weekly or monthly STP towards equity fund.
Completely agree with Rajesh. Its never advisable to invest big amounts at 1 go. Especially if one is “starting” to invest. One bad experience & your spouse will always stay away from the market.
However, if you don’t mind taking notional loss on your portfolio (of even upto 20% – i.e. loosing upto Rs. 10,000 in short-term), then you can still go ahead with lumpsum investment.
There are 2 options you can consider while doing lumpsum –
1. Do all lumpsum in Tax saving MFs –
A good diversified portfolio that you can consider for Tax saving is would be – Canara Robeco Tax Saver, HDFC Tax Saver & Fidelity Tax Advantage
2. Make investments in non-Tax saving MFs
Here you can consider – ICICI Prudential Discovery Fund, Reliance Regular Savings Balanced, HDFC Prudence & IDFC Premier Equity Plan A
You may consider funds given in options 2 for SIP over 6 months to cut-down the risk, if you are open to SIP.
As @rakesh said, please make your own decision & take this as guidance only 🙂
Hope this helps!
As the market is at its peak it is not advisable to go in for lumpsump investment now. What if you invest tomorrow and market correct sharply, you will be in loss. Instead start monthly SIP of 1k each in 3-4 funds of your choice. Over a long period of time you will definetely get good returns.
Below are some of the consistent performing funds over a long period of time –
HDFC Top 200
DSP Top 100
Birla Sunlife Frontline Eq fund
Do your own research and invest. I personally have been investing in the above funds.
Sorry I mis-typed @rakesh’s name as Rajesh. Apologies.
I would like to clarify that, in option 2 – all fund are slightly aggressive funds. I mentioned these because of your “real” long-term horizon of 15 years!