I am a high risk investor . I am 29 years old and have been investing for the past 7-8 months . I have three SIPs.
ICICI Prudential Technology Fund: Rs10,000
Quant Mid Cap Fund: 5,000
Small Cap Fund: 5,000
I am also into equity. My portfolio is around Rs6 lakh. Returns till date around 1-1.5 percent. I wish to make a corpus of 2 crore in the next 10 years. Kindly advise where to invest and where not to .
--Dixit Aggarwal
You have not mentioned your risk profile. We always ask our readers to choose mutual fund schemes based on their goals, investment horizon and risk profile. It is not clear how you choose your mutual fund schemes. You are investing in a technology scheme, mid cap scheme, and small cap schemes. All these categories are highly risky and they are suitable for aggressive investors. They are not suitable for a new investor.
We also can’t comment on your direct equity investments. Remember, it is extremely risky. Unless you have the knowledge and time to research stocks, don’t invest directly. You may incur losses. Don’t treat the stock market as a game. The only way to make money is to invest regularly over a long period.
Assuming an annual return of 12%, you need to invest around Rs 86,000 to create a corpus of Rs 2 crore in 10 years. The best way to make it is to invest in a scheme that matches your investment objectives and risk profile. For example, you can invest in large cap schemes if you want to create wealth without too much risk. You can invest in flexi cap funds if you have a moderate risk profile.
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I'm well-versed in investment strategies and mutual fund analysis. The provided article talks about a 29-year-old investor seeking to accumulate a corpus of 2 crores in the next decade. They've invested in SIPs (Systematic Investment Plans) in ICICI Prudential Technology Fund, Quant Mid Cap Fund, and Small Cap Fund, with a portfolio worth 6 lakhs, yielding returns of 1-1.5%.
The advice in the article is to align mutual fund selections with one's goals, time horizon, and risk tolerance. It cautions against the high-risk nature of the investor's current portfolio, especially for someone new to investing. Direct equity investments are highlighted as risky, requiring extensive research and expertise.
The recommendation includes investing in large-cap schemes for lower risk and wealth creation, and flexi-cap funds for moderate risk profiles. The suggested corpus of 2 crores in 10 years, assuming a 12% annual return, would require an investment of around 86,000 rupees annually.
Now, let's break down the concepts mentioned:
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SIP (Systematic Investment Plan): A method of investing in mutual funds where an investor regularly invests a fixed amount at pre-defined intervals.
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ICICI Prudential Technology Fund: This is a mutual fund scheme that primarily invests in technology-related stocks. It belongs to the sectoral or thematic fund category, which focuses on specific sectors or themes.
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Quant Mid Cap Fund and Small Cap Fund: Both are mutual fund schemes that primarily invest in mid-cap and small-cap companies, respectively. These categories typically have higher growth potential but are riskier than large-cap funds due to the size and stability of the companies they invest in.
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Direct Equity: Investing directly in stocks of companies rather than through mutual funds. It requires in-depth research, market understanding, and continuous monitoring.
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Large Cap Schemes: Mutual funds that primarily invest in stocks of large-cap companies. These are relatively stable and lower risk compared to mid-cap and small-cap funds.
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Flexi Cap Funds: Mutual funds with the flexibility to invest across market capitalizations based on market conditions. They offer a mix of large, mid, and small-cap stocks and cater to moderate risk profiles.
The article emphasizes the importance of aligning investment choices with personal risk tolerance and financial goals, warning against high-risk investments for inexperienced investors and advocating for a disciplined, long-term approach to wealth creation.
