Widely read:
I am a moderate risk taker and want to invest around Rs 50,000 per month with a horizon of seven to eight years. Which type of fund should I choose from the universe of large, mid and small caps?
- Gopu
I would say that you should not invest in any of these categories. Given that you are a moderate risk taker and very likely a first-time investor as well, I would advise you to invest in an aggressive hybrid fund (balanced fund). With this, you will not be scared out of the market, as aggressive hybrid funds are usually 75 per cent in equity and 25 per cent in debt.
The in-built 25 per cent fixed income allocation provides stability and acts as a shock absorber. So, when the market falls, the fund doesn't crumble as much and remains comforting for anybody who is just getting started with his/her investment journey.
You should continue with your investments for two to three years and increase your contribution of Rs 50,000 in line with your rising income. After three years, consider a multi-cap or a value fund. Your objective should be to get exposure to all parts of the market and average your investments. And at the end of seven to eight years, perhaps you will be able to accumulate a meaningful amount. The basic threshold should be to beat inflation and earn more than fixed income returns.
This article was originally published on July 24, 2019.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
For grievances: [email protected]
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
