Hello Ulhas, I am 38 and will turn 39 this march. I have not invested in mutual funds and will like to start. My investments will be 15 k a month and could you please guide me. I will be investing for next 20 years

Ans: Adita! Starting your investment journey at 21 is a commendable decision, much like planting a seedling that can grow into a sturdy tree over time.

For beginners like you, a diversified approach is often recommended. Look for mutual funds that spread their investments across different sectors and company sizes. This approach can help balance out the highs and lows of individual sectors or companies, somewhat like not putting all your eggs in one basket.

Consider starting with a mix of large-cap and multi-cap equity funds for growth potential, supplemented by a balanced fund for stability. As you gain confidence and experience, you can explore other categories like mid-cap and small-cap funds for higher growth potential.

Remember, the key is consistency and patience. Even a small, regular investment can compound significantly over time, thanks to the magic of compounding. Keep an eye on your investments, but avoid the temptation to constantly tweak or react to short-term market movements.

Lastly, always align your investments with your financial goals and risk tolerance. Happy investing, Adita!

Ans: It's impressive that you're thinking about investing at such a young age. Here's a suggestion for your monthly investment in mutual funds:
• Diversified Equity Funds: Since you have a long investment horizon of at least 20 years, you can consider investing a significant portion of your monthly amount in diversified equity funds. These funds invest across various sectors and market capitalizations, offering growth potential over the long term.
• Large Cap Funds: Allocate a portion of your investment to large-cap funds, which invest in well-established and financially stable companies. These funds provide stability to your portfolio while offering steady returns over time.
• Mid and Small Cap Funds: To capitalize on the growth potential of mid and small-cap companies, consider investing in mid and small-cap funds. These funds have the potential to deliver higher returns over the long term but come with higher volatility.
• Flexi Cap Funds: Flexi cap funds offer flexibility in asset allocation across market capitalizations based on market conditions. They can adapt to changing market dynamics and provide opportunities for capital appreciation.
• Balanced Advantage Funds: Considering your age and long investment horizon, you can also include balanced advantage funds, which dynamically allocate between equity and debt instruments based on market valuations. These funds offer downside protection during market downturns.
Before investing, it's essential to assess your risk tolerance, investment goals, and time horizon. Additionally, consult with a Certified Financial Planner (CFP) who can provide personalized recommendations based on your financial situation and goals.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in