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Gradual Additions

Gradually increase the investment amount once you become comfortable with how funds work…

I am 35 and have no investments till date. I am keen to invest Rs 25,000 which I can increase to Rs 50,000 for the next ten years. I have no other financial commitments after I paid my housing loan. Can you suggest funds I should invest in and what should be my allocation?
- Sameer Bajaj

Though you are late to get into investing, you still have several years ahead of you to catch up. By owning a house, you have already built an asset and if you show the same discipline as you would have towards repayment of the loan with investing, you can build a good corpus over time.

We are suggesting a portfolio of five funds with 70 per cent equity allocation. These are funds for a growth portfolio, which is well diversified in style and numbers. The funds are all highly rated with a proven track record and performance. Make sure you start investing them with equal allocation and gradually increase your investments once you get comfortable with mutual fund investing and observe the way your investments grow over the next 4-6 months. Also, make it a habit to track the performance of your investments at least once a year to ascertain if it is making expected progress; this exercise will help you not only help you with your investments, it will also help you make any changes to the selected funds if necessary.

Schemes  Category  Rating  3-yrs ret (%)  5-yrs ret (%)
BNP Paribas Bond Regular Debt: Income ***** NA NA
Fidelity Equity Large & Mid Cap **** 14.13 20.54
HDFC Top 200 Large & Mid Cap ***** 16.54 22.19
ICICI Prudential Dynamic Large & Mid Cap **** 13.93 20.71
Reliance Equity Opportunities Multi Cap **** 18.60 20.44
Returns as on June 08, 2011 Ratings as on May 31, 2011


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