How to choose a fund for your short-term goals

Dhirendra, before we get into a deep discussion on how to go about choosing a fund for short term goals, I would like you to first clarify what actually are short-term goals? Dhirendra: Short-term goals could be anything for which you need money in the near term, say the money that you need for buying a car, or going on a holiday within three months to one year down the line. In the investment context, I would say that a short-term goal is anything for which you need money in a predictable manner within five years. The investment strategy for this would depend on the negotiability of the goal. There are goals which are non-negotiable like the money you need for your child's admission in a school or your retirement income. And there are goals which are negotiable. Going on a holiday in the next six to twelve months is a negotiable thing. Even buying a house could be a negotiable thing. You plan to buy a house in five years from now, but if it is six years or if it is four years, it won't make a difference. So negotiability of your goal within five years is the primary input which will drive any a

This article was originally published on February 14, 2020.