This is the second in our seven-part series where we share all that you need to know to make profitable mutual fund investments.
23-Dec-2021 •Omkar Vasudev Bhat and Shruti Agarwal
Congratulations! After realising your risk appetite, you are in a pretty good position to plan for your financial goals. In the table 'Your financial road map', we have drawn up guidelines on how to build your portfolio. The table is divided into two parts based on the risk appetite of investors. Thereafter, the goals are categorised based on their individual time horizons.
However, before you start with your goals, you should first have a safety net for any emergency. And when it comes to building a safety net, you need a two-pronged approach - having adequate insurance (health as well as life) and having a sufficient emergency corpus for any unforeseen roadblocks that you may encounter during your journey. Address these two things even before you start your investment journey.
Next comes forming your portfolio. Although the table provides some basic ideas, you should figure out the exact allocation to any asset class based on your risk appetite, comfort and negotiability of your goal (more on this later).
Also in 'How to become an expert mutual fund investor' series:
Part 1: Know thyself
Part 3: Balance is the key
Part 4: Avoid hitting bumps
Part 5: Don't forget the reverse gear
Part 6: Cherry-picking funds
Part 7: Be a sage
Five smart money moves to make in 2023
Factor-based mutual funds: Fit or flop?
