Where to invest if you are young and want to invest for long term?

– Name withheld on request

Starting from a young age will always work well as you have a long horizon to invest and also have the ability to take risk. You can invest in some mutual fund schemes. A monthly investment of Rs 10,000 for 15 years will help you build a corpus of Rs 40 lakh or Rs 47 lakh, assuming a return of 10% p.a. and 12% p.a. respectively. In 20 years, the corpus may grow to Rs 72 lakh or Rs 91 lakh at 10% per annum and 12% per annum respectively. To achieve your goal of huge corpus, you can try and increase the SIP (Systematic Investment Plan) amount by 20% every year. Many investors follow this strategy as it gives them better visibility to plan their investments over the years. A 20% increase in the SIP amount will help you reach Rs 4.5 crore in 20 years assuming 12% p.a. return. At 10% p.a. return, you can reach Rs 4 crore in 20 years. We suggest you follow this strategy as your income and investable surplus keeps on improving every year.

We suggest you start with Large Cap, Large & Mid Cap and Flexi Cap Funds at this stage as you are starting your investment journey. Once you gain more confidence, you can add some allocation to mid cap funds in future. To start with, you can look at the following funds – UTI Nifty Index Fund (Rs. 2,500), Parag Parikh Flexicap Fund (Rs. 2,500), Mirae Asset Emerging Bluechip Fund (Rs. 2,500) and Canara Robeco Bluechip Fund (Rs. 2,500). . Parag Parikh Flexicap Fund invests not only in Indian equities (large, mid and small cap stocks) but also in stocks of foreign companies.

Harshad Chetanwala is the co-founder of MyWealthGrowth.com. Send your queries to mintmoney@livemint.com and get answers to them from industry experts.

first article