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Where should I invest Rs 30,000 every month?

Dhirendra Kumar discusses how to commence your investment journey


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I am 33 years and having a stable income. As a moderate- to high-risk taker, I'm looking forward to investing around Rs 30,000 every month. How should I start?
- Sudhakar

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It's a very difficult question. To begin with, I would not like to go by your assessment of what kind of risk taker you are, as investors' minds change. In a rising market, investors may turn out to be high-risk takers, while during a falling market, they pace down to moderate-risk takers. However, in the long term, only two things matter. First will be your investment horizon. If you have a horizon of 10-15 years, then you are well positioned to assume risk. However, if you have a tangible goal that is three years from now, then you can't because then you'll be worried all the time.

The second thing is your experience. It is important to experience market-linked investments on your own. Because you won't learn from other people's mistakes or from reading my columns. When you see your investments falling or rising, it's only then that you act!

Take for example that you invested Rs 30,000 every month for one year in an equity fund. Assuming it was doing reasonably okay, your investments went up to Rs 4 lakh. However, then, the market went down by say seven per cent on the back of uncertainty around election results, oil prices, etc. All of this resulted in your investments declining and the entire year's accumulation disappearing in one week's time. Until you experience this four-five times and in a span of one to three years in a full market cycle, you won't understand the benefit of it.

So, as a first-time investor, start conservatively and invest regularly. Don't go by your own assessment of risk-profile. Start an SIP in an aggressive-hybrid (balanced) fund and don't look at your investments for one- and one-and-a-half year. Only after experiencing this, consider an all-equity fund.

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