how can I get min. 12% return in investment?

Ans: You’re aiming for a minimum 12% return—that’s a strong, ambitious goal. Very few investment options can offer this consistently and sustainably, especially without taking higher risk. But with long-term discipline, goal clarity, and guided fund selection, it is possible to target this return in a planned and structured way.

Let’s evaluate this properly.

? No fixed-return product gives 12% return

– Bank FDs give 6% to 7% only.
– PPF gives about 7.1%.
– Senior citizen schemes give slightly more.
– All of these are safe but low-return options.

– They can never reach 12% returns.
– So you need to move beyond fixed-income tools.

? Mutual funds can help you aim for 12%

– Only equity mutual funds can offer 12% average over time.
– Not every year, but over 10–15 years, it is achievable.

– You must choose quality actively managed equity mutual funds.
– They outperform inflation and other asset classes.

– SIPs help reduce risk of market entry.
– With long-term SIPs, returns smoothen out.
– Many investors have built wealth this way.

? Avoid index funds if 12% is your goal

– Index funds track the market passively.
– They can’t beat the index.
– No professional manager handles them.

– If markets fall, index funds fall fully.
– They offer no protection in downside.

– You want 12% returns, not average returns.
– So index funds are not ideal.

– Actively managed funds aim to beat index returns.
– Fund managers actively select and shift stocks.
– This creates opportunity to get 12% and more.

? Don’t choose direct mutual fund plans

– Direct plans seem cheaper.
– But they don’t come with proper guidance.

– Without help, you may choose wrong funds.
– Or exit early during market fall.

– These mistakes lower your final return.

– Regular plans via Certified Financial Planner are safer.
– You get fund advice, monitoring, and yearly review.
– This adds real value over time.

– So choose regular plans through a CFP-backed MFD.
– A small fee saves big mistakes.

? Risk and time are two must factors

– Equity returns are not linear.
– Some years will be very high, others may be flat.

– If you invest for 1–3 years, returns may be low or negative.
– But for 7–15 years, returns smoothen out.

– So you must be ready to wait.
– Patience is the secret behind 12% return.

– Also, you must accept some market risk.
– But this risk reduces with time and discipline.

? Asset allocation decides your overall return

– If you put 100% in equity, risk is high.
– But returns can go near 12%.

– If you mix equity and debt, returns reduce slightly.
– But risk also becomes manageable.

– So mix should match your goal horizon.
– For long-term goals (10–15 years), high equity is okay.

– For short-term goals (1–3 years), equity is risky.
– So decide asset mix based on goal and time.

? What kind of funds to consider

– Diversified large-cap and flexi-cap funds suit long term.
– Also consider multi-cap and focused equity categories.
– Avoid sector funds or thematic funds—they are risky.

– For short-term, use debt or liquid funds only.
– Don’t expect 12% from these.

– Always invest with goal clarity.
– Without goals, you may stop early and lose compounding benefit.

? Increase SIP every year to beat inflation

– Even if return is 12%, your goal amount grows with inflation.
– So increase SIP by 10–15% yearly.
– This keeps you ahead of inflation.

– Don’t stop SIP during market falls.
– That’s the time to stay invested and buy cheap units.

– If you stay consistent, 12% becomes reachable.

? Tax efficiency helps retain more return

– Equity funds held for over 1 year are taxed as LTCG.
– New rule: LTCG above Rs 1.25 lakh taxed at 12.5%.

– Short-term gains are taxed at 20%.
– For debt funds, gains are taxed as per your slab.

– So use equity funds for long-term goals only.
– This keeps taxes low and return high.

– Also, don’t redeem fully unless goal is near.
– Use partial withdrawal for higher tax efficiency.

? Avoid these common return-killers

– Stopping SIP during market fall
– Choosing wrong fund without research
– Investing in insurance-cum-investment plans
– Mixing short-term goals with equity funds
– Jumping between funds too often

– All these reduce final return.
– Even good funds give poor returns if handled badly.
– Guidance from a Certified Financial Planner avoids these traps.

? Avoid ULIPs, LIC policies for investment returns

– If you hold endowment or ULIP, surrender if policy is old enough.
– They give 4% to 5% only.

– Reinvest in mutual funds for better growth.
– Keep insurance and investment separate.

– Term insurance gives protection.
– Mutual funds give wealth creation.
– Don’t mix them.

? Track your goal and adjust portfolio

– Review once a year.
– Are your funds doing well?
– Are you on track for your target?

– If not, make changes with planner’s help.
– Rebalancing helps you reduce risk closer to goal.

– Don’t keep the same mix till the end.
– Shift from equity to hybrid or debt as goal nears.

– This locks the returns you already earned.

? Finally

– 12% return is not a promise.
– But it is a reachable target with equity mutual funds.

– Stay invested for minimum 10–15 years.
– Use SIPs in actively managed mutual funds.

– Avoid index funds and direct plans.
– Take support from a Certified Financial Planner.

– Match fund type with goal horizon.
– Review yearly and rebalance if needed.

– With right approach and patience, your money can grow well.
– Don’t chase returns—follow the process.
– Return will follow naturally.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment