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Can I invest in mid and small-cap equities for three to five years?

Ashutosh Gupta explains where to invest for the short term

Is it the right time to invest in mid- and small-cap equities for the next three to five years?
- Dilip Ramdas Sonar

Well, no, I would advise you against opting for mid and small-cap funds given your time horizon. Three to five years is a short period for risky and very volatile categories like mid-cap funds or small-cap funds.

More broadly, I would not recommend you an all-equity allocation at all for your investment horizon. You should have only a limited portion of your money in equity, with the remaining in some fixed income alternatives to cushion against market volatility. So probably hybrid funds would be better suited to you. Mid- and small-cap funds are avoidable.

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