I'm 28 years old. For the past three months I have been saving Rs 6,000 per month, and right now have an accumulated balance of Rs 18,000 in my savings bank account. I have six months now to get married. Please suggest some better way of investing so as to reap maximum benefits. I'm ready to chance my luck in the equity market. I don't have more than six months. Please advise.
Well it seems like the only reason you are currently saving is for your marriage and you have already made up your mind that your savings habit is going to come to an end with your marriage. This in fact is quite contrary to what we believe should be the case. Your marriage signals the start of a new phase in your life and soon enough there could be a possible expansion in your family. What all this means is that the saving habit that you have inculcated should be stuck to for the rest of your earning life even if that means living a life of relative profligacy.
Now as far as your question is concerned one thing you have to understand is that there is no magic wand for investing which will enable you to generate extraordinary returns. At least we have no such wand that is for sure. However, we understand that your immediate objective is liquidity given your forthcoming marriage. So we suggest that you put atleast 50 per cent of your portfolio into short-term debt funds or the short-term plan of a floating rate fund. This will enable you to preserve your capital and earn reasonable return.
About your intentions of "chancing" the equity markets, all we can do is suggest an alternative avenue for satiating your urge. You could take a trip to Kathmandu and try your hand at the casino there. If you are serious about investing in the equity markets then you have to think long-term. So we suggest that you allocate a certain part of your portfolio to diversified equity funds and forget about them for a few years. Of course you must choose the fund judiciously (you can use the Value Research Scorecard as a guide for the purpose). One aspect that you should not ignore is that of taxation. If you do end up making gains in the short-term then you will have to pay a short-term capital gains tax of 10 per cent. But over long-term (above one-year) your gains will be tax-free.
We would again like to reiterate that regular saving is the only way to tide over the financial crises in your life. So do not give it up!