How to get rich with less stress: The index fund way

The smartest way to build wealth lacks the drama of timing the market, picking hot stocks and chasing trends. Instead, you need consistency, clarity and control. A thoughtfully constructed, low-cost portfolio can help you ride the ups and downs of the market while steadily building wealth. One of the easiest ways to achieve this is through a balanced allocation between large-cap, mid-cap and small-cap mutual funds, with the bulk in index funds. Here's a simple, effective mix: - 70 per cent in large-cap index funds for stability and predictability, - 20 per cent in actively managed mid-cap funds for targeted growth, and - 10 per cent in actively managed small-cap funds for high-return potential. This may sound too simple, but that's exactly the point. A low-cost, disciplined strategy like this can help you create real wealth over time without the stress of stock picking or second-guessing fund managers. Why index funds for large-caps? The large-cap space is dominated by the biggest companies in the country—think Reliance, Infosys, HDFC Bank, among others. These stocks are heavily tracked and well understood, making it tough for fund managers of active large-cap funds to consistently find an edge over vanilla, passive funds that merely track the large-cap index. The data backs this up. Based on daily rollin

This article was originally published on April 15, 2025.