Where should I invest ₹1 lakh to earn best returns in a short span of time

– Mr Anirudh

We’ll assume that the money you want to invest should be back in about two years from now. Investing in equities is not ideal for this time frame, as it is too small for equities, which as an asset class are not designed for short-term investments. In the light of the same, we would recommend you to invest in Debt Mutual Funds. Depending on your goals, you can invest in ultra-short or short duration funds. If you want to keep a portion of your corpus away for more than 10 years, a combination of index funds and flexicap funds can be considered.

I am 35 years old central government employee. i have salary in hand 80,000 per month. I have been investing in mutual funds since 2016. my current MF balance is 10 lakhs. Currently, I am investing 27,000 per month in MF. it includes 2,000 per month in ABSL Tax Saver, 3,000 in Mirae Asset Emerging Bluechip, 4,000 each in Mirae Asset Healthcare Fund, Axis Focus and Axis Long Term Equity, 5,000 each in Nippon India Nifty 250 Smallcap and Motilal Oswal Nasdaq 100.

my goal is to build a fund of 50 lakhs more for my child’s education after 7 years 1 crore in 13 years for the education of another child. I want to make another fund of 1 crore in 20 years. I want to add 7,000 per month on my investment. I have 1 crore term insurance. Please suggest if I need to make changes in my portfolio and where should I invest the extra 7,000

– Name withheld on request

We would advise you to close your SIP with Mirae Asset Healthcare Fund as we would not suggest using sectoral funds in the portfolio. Instead you can consider investing in index funds. You can also consider stopping your SIP in ABSL Tax Saver Fund and consolidate those funds in Axis Long Term-Equity Fund. From a long term perspective, to get a more diversified international fund, you may consider stopping the SIP in Motilal Oswal Nasdaq 100 Fund and invest in HDFC Developed World Index Fund of Funds instead. for extra 7,000, you can consider a medium term debt fund like SBI Magnum Medium Duration Fund. Assuming that you have accounted for inflation in your goals and you increase your SIP by 6% every year, as your income increases, you are likely to reach your first target comfortably but with intervals. As a result, you may face a shortcoming in your second goal. There is only six years between the first and the second goal. Thus, we recommend you to increase your SIP from here from 34,000 40,000 per month as this should enable you to achieve your second and third goals within the time frame.

Vishal Dhawan is a certified financial planner and founder of Plan Ahead Wealth Advisors.