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I am 25 and have an investible surplus of Rs 50,000 which I want to invest in 2 - 3 equity oriented mutual funds for an investment horizon of 15 - 18 months. As mutual fund NAVs are high currently, I am apprehensive to enter the market at this stage. Please advise whether I should wait for the NAVs to come down, or whether I should invest the amount right now. I also want to know whether a demat account is necessary for investing in mutual funds, as I have not opened a demat account till date.
- Abhay Dhar

For a 25-year old, you are very risk averse. Your apprehension on the NAVs being high at the moment is valid. However, if the market drops from this level, you will remain equally apprehensive to enter it. You should definitely stay away from equity, especially for the investment time frame of 15-18 months that you have. Equity investing, even through mutual funds best works over long time periods, and 5 years is a good time frame to plan for. You will be better of looking at a fixed deposit option for the same period from a bank. And, to invest in mutual funds you do not need a demat account.

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