Hi Sreekanth,
I'm a regular reader of your blogs at relakhs.com and appreciate your work -- first of all thank you very much for such great content. You are awesome in explaining very critical/confusing things in the most simplest way possible.
I never invested in any mutual fund and completed my KYC few days back.
Is this good time to invest lumpsum in mutual funds?
I'm planning to invest around 50k in each (Large, Middle and Small Cap) from the list in https://goo.gl/IMypb1
And then later want to SIP around 5k in each fund via SIP.
Also should i start SIP's now and wait for the market to go down and then go for the lump sump investments.
Could you please advice if this is good time to start investing or i should wait for the next financial year to start.
Thanks in Advance
10 Answers
Hi,
May I know your investment horizon? When do you need to withdraw this money?
Kindly do no try timing the market. So, instead of waiting for the right time, you may start your SIPs right away for long-term goals.
How many funds you would like to pick from each category? or is it one each from three fund categories?
I would like to spend this for long term (at least 10-12 years). But in case in the near future (2-3 years) if i plan to buy/invest in a flat i might have to sell them.
I'm comfortable here to take some amount of risk. So from your above suggestion its better to go for SIP against lump sump considering the current market. I'm planning to pick a single fund to start from each category -- it will also help in diversification i'm assuming, please correct me if i'm wrong here. Now considering the scenario where it is a good idea to invest in SIP, and i've around 2L with me know to invest. Now how much should i be spending in each SIP ?
What will you suggest ?
I'm comfortable here to take some amount of risk. So from your above suggestion its better to go for SIP against lump sump considering the current market. I'm planning to pick a single fund to start from each category -- it will also help in diversification i'm assuming, please correct me if i'm wrong here. Now considering the scenario where it is a good idea to invest in SIP, and i've around 2L with me know to invest. Now how much should i be spending in each SIP ?
What will you suggest ?
Hi,
Yes, diversification can be achieved by investing across fund categories.
Kindly note that investing in equity funds can be risky, and you may see even negative returns in short term.
So, invest in MFs only if are ok to accept negative returns.
Else, you can divided your investments in to two Portfolios. One for short term - Corpus for house purchase. And another one for long-term goal(s).
How much SIP? It depends on your Goal corpus amount.
Kindly go through below articles and download available calculators, these can give you some idea..
https://www.relakhs.com/retirement-planning-calculator-3-easy-steps/
https://www.relakhs.com/calculate-kids-education-goal-amount/
Thanks much Sreekanth, the above articles you mentioned along with some others helped me understanding the SIP amount i need to have for my short/long term goals.
I went through your article regarding Arbitrage funds, I understood it is very less risky.
But from you previous experience have you seen cases were those funds resulted in negative returns ?? If yes, what is the probability of that ??
I went through your article regarding Arbitrage funds, I understood it is very less risky.
But from you previous experience have you seen cases were those funds resulted in negative returns ?? If yes, what is the probability of that ??
Hi,
I have been tracking Arbitrage funds for the last one year or so only...
Returns are not guaranteed. Low returns are possible when a fund manager fails to pick/identify arbitrage opportunities that are available in market, also when markets are less volatile. Safety of capital cant be totally guaranteed, but very remote chance of it happening.
So what according to you will be the best funds to go for investment for short term (6 to 12) months.
Hi,
For short term horizon, I always believe that one should not chase returns. Safety of capital should be given high priority.
Are you planning this investment to accumulate for an Emergency fund? or ??
Yes, i have some savings which i will be dividing into two to invest -- Emergency Fund and Marriage.
Hi,
You may pick FDs & RDs.
If horizon is just over 12 months, you may pick Arbitrage fund (small allocation).
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