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Summary: A reader asks how to invest Rs 12 lakh over a 3-4 year horizon, and whether a debt fund with an STP is the right route. The response explains why a conservative approach suits this short time frame.
How should I invest Rs 12 lakh for 3-4 years to generate wealth? Is a debt fund with a systematic transfer plan a good option? – Anonymous
For a 3-4-year horizon, temper your wealth-creation expectations. Equities need a decade or more to deliver their best results, so short horizons call for a conservative approach. Conservative hybrid funds or equity savings funds suit this horizon better than aggressive equity investments.
If you choose a conservative hybrid fund, which is largely fixed income, stagger the investment over 3-4 months rather than deploying it all at once. Investing Rs 3-4 lakh at a time reduces your exposure to market volatility.
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This article was originally published on September 02, 2024, and last updated on August 18, 2026.
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