I never invested anywhere. I am now 48. I suddenly got a windfall of Rs 5 lakh after tax. Where do I invest this money? I am apprehensive about mutual funds, as reports suggest they are not doing well due to some measures by Sebi. One condition is that I may need to withdraw about Rs 2 lakh, maybe after a year. The rest can be invested for three years. Please advise on how do I spread out my investment?
-- Surender Jain, Jaipur
All that Sebi did recently was to give out guidelines for recategorisation of funds due to which all the mutual fund schemes have now to compulsorily invest as per laid down mandates and remain true-to-label. The investors would, therefore, always know what they are investing in and the schemes cannot deviate from these guidelines, which they routinely used to earlier. Hence, mutual funds (MFs) have become even better than earlier for an investor. To say that funds have not been doing well due to these new guidelines is not correct. There was correction in the broader stock market but then that’s how stock markets have always been. My recommendation to you is not to get swayed by rumours and invest the way you would normally do.
For the money that you need after one year, please do not invest in equity MFs. Debt funds would be the MFs to go in for in general and I would suggest, Ultra Short Term category within debt funds, for such a short investing time frame. You may even go in for bank FDs for the Rs 2 lakh if your period of one year is absolutely fixed. For balance of the amount, Hybrid Aggressive Funds or even Large Cap equity MFs would be a good option.