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Begin With Balanced Funds

SIP investments in balanced funds are the right stepping stone for novice investors…

I am 36 and would like to start investing in mutual funds through SIP. I can invest Rs 5,000 per month. I have two life insurance policies and health insurance policies that also covers my family. I need your help in choosing funds to invest in.
- Raju Muthuswamy

For a 36-year old you are a bit late to investing. However, by opting to invest in equity mutual funds through SIPs; you have made the right choice in taking part in the equity markets. Equity is the asset class to invest in for long-term wealth creation.

For a new investor, we suggest you consider investing in a balanced fund. These are funds that have 35 per cent equity exposure to debt which brings in stability to their performance and also insulates the returns from market volatility. Invest in a systematic and regular manner in these funds to get into the habit of investing and experience the performance of your investment in them. You can consider investing in funds such as HDFC Prudence and Reliance Regular Savings Balanced. After a six month period, you will be in a better position to understand how mutual fund investing works and gain confidence with your investments; you can get into investing in a large- or large- and mid-cap fund then and build your mutual fund portfolio.

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