For any investors, understanding the investment horizon, risk tolerance, and financial goals is paramount before following any investment strategy.
Diversification enhances resilience and potential returns while mitigating specific risks associated with individual funds.
I am a young IT professional. At the age of 28, I am earning around Rs 1.5 lakh per month. I want to buy a luxury home after 10 years and at least save Rs 1 crore to make a maximum payment towards home buying. How should I plan to do mutual funds SIPs to accumulate 1 crore of wealth? I am unmarried and have no debts.
Reply by Rajiv Bajaj, Chairman and MD, BajajCapital
For any investors, understanding his investment horizon, risk tolerance, and financial goals is paramount before proposing any investment strategy. With an aggressive risk appetite and a goal of accumulating Rs 1 crore in 10 years, we recommend constructing an equity-oriented portfolio, strategically diversified across various categories for optimal risk management.
To achieve this ambitious goal, we suggest initiating a monthly systematic investment plan (SIP) investment of Rs 43,000 (assuming a CAGR return of 12%). Additionally, leveraging any surplus funds to invest in equity-oriented mutual fund schemes through SIPs can expedite goal attainment. Seizing opportunities presented by market downturns to bolster SIP contributions can further accelerate progress towards the financial goal.
It’s great to see you are already thinking about purchasing a home. Saving more money towards your home upfront can help minimise the loan amount, making it easier to manage payments over the next 20 years or so.
Diversifying your monthly SIP allocation equally among Kotak Multi Cap Fund, Nippon India Multi Cap Fund, HDFC Mid Cap Opportunity Fund, HDFC Flexi Cap Fund, Parag Parikh Flexi Cap Fund, and Bandhan Small Cap Fund ensures a well-rounded portfolio across categories and asset management companies. This diversification strategy enhances resilience and potential returns while mitigating specific risks associated with individual funds.
(Views expressed by the investment expert are his/her own. E-mail us your investment queries at [email protected]. We will get your queries answered by our panel of experts.)
