Dhirendra Kumar suggests ways to invest at a young age
What kind of investments would you suggest for someone in their 20s?
If this is the money you can invest and forget, somebody in their 20s who is venturesome can start even with a small-cap fund. However, there's something which one should keep in mind. These funds prove to be the most rewarding asset category over a very long time, but in the worst of times, they are in a free fall, which is quite unnerving. During the 2008 crisis and a few other phases after that, they quickly declined in value by 50 per cent in a brief period. It is something like your Rs 100 becoming Rs 50, which most investors are not used to. So be aware of that.
But here is a more methodical approach to investing in your 20s. If you earn and pay taxes, estimate your tax-saving investment requirement and invest that amount in a tax-saving fund. There are great tax-saving funds available for Indian investors. For the remaining money you can save, start with a flexi-cap fund. If you wish to assume greater risk as you are in your 20s and still have 40 years to work, you can even be investing in small-cap funds.