I earn Rs 30,000 every month and have a 2-year-old son. I currently invest Rs 3,000 every month in PPF and want to start an SIP for the long term to save for my retirement and my son's education. What type of Mutual Fund would you suggest?
When you have a 2-year-old son, you have at least 15-16 years for his education. Your retirement maybe 25-30 years away. So you have all the time on your side. Go for an all-equity fund with a good track record of doing well in a falling market and a rising market. Maybe go to Value Research Online and hunt for this kind of fund.
You must look at variables such as a fund manager who has experienced the ups and downs, a fund that has done well in a rising market and a falling market, and a fund that invests in a flexi-cap or multi-cap fund. Choose one or two funds and invest regularly.
It is important not to look at the investment value in the first one or two years. It is essential because as a PPF investor when you start investing in equity and compare the performance, you will feel happy when it is good. The other times, you'll be disappointed. So it takes two to three years for the returns to be visible in a manner where you will not be disappointed, and it gives you enough confidence to carry on.