Suggest where to invest in mutual funds?
In India, there are 1800+ different mutual funds available for investment. Therefore, you may find it difficult to choose the correct fund. When you start, you should have a clear goal and purpose of investing in a mutual fund.
- For long-term wealth creation, you can choose equity mutual funds as the risk will reduce over time.
In this category, some popular funds are: large-cap funds (invest in stable, big companies), mid and small-cap funds (invest in mid and small-cap companies, which come with higher risk), flexicap funds (the fund invests across large, mid and small companies according to market conditions).
- If you want stable returns in the short term, you can go with debt mutual funds. In this segment, my choice is liquid funds. When I save money to buy something, I invest it in liquid funds. When I reach my goal, I withdraw the funds to my bank account.
Also, there are short-duration funds where you can invest your money when you want to save money for a car or travel planning within the next 1-3 years.
- This is a mix of both high-risk and low-risk mutual funds as it combines both equity and debt investment options during fund allocation. My father prefers this type of mutual fund for his retirement corpus.
Considering all the above factors, you can invest in mutual funds according to your investment goals and risk tolerance. Before investing, do not forget to analyse the fund’s past returns, expense ratio, exit load and other important things.