Given the volatility in financial markets worldwide, personal finance expert Harshvardhan Roongta of Roongta Securities says that investors should look to diversify their investments.
In an interview to CNBC-TV18, Roongta advices investors to bet on funds that invest in equities, debt and commodities as well. �Track the fund over a period of time and take a call accordingly after two years,� he added.
However, he adds that if one�s time horizon is limited, they should look at safer investments like recurring deposits or post office savings.
Below is an edited transcript of his interview. Also watch the accompanying video.
Q: Investor is a student who wants to invest Rs 3000 per month to earn Rs 1 lakh at the end of two years. How should he allocate his money?
A: He is the only earning member and has three dependents, and considering the time horizon that he has which is only about two years from now, equity would not be an appropriate asset class for him.
I am going to suggest him to invest the entire Rs 3000 into recurring deposit with his existing bank or he could approach a local post office. The corpus that he will accumulate after two years is about Rs 75,000-80,000. Going in for equity at this juncture may not be appropriate for him. So he should invest into safe investments because the time horizon is two years by choosing a recurring with his bank or a post office.
Q: Investor can invest Rs 4000 per month, how should he allocate his money?
A: He has a time horizon of five years and he wants to accumulate a corpus of Rs 15 lakhs in five years. The first thing is with an investment of Rs 4000 per month over a period of five years, Rs 15 lakh cannot be accumulated. Even if we were to assume a 14% CAGR, the corpus that I see him accumulating is about Rs 3.5 lakh. But never the less, it�s a good habit to start early, it�s a good habit to form which is to save and invest for a targeted goal. So he can start with whatever he has in hand today.
Given the turmoil in the equity markets, both domestically as well as the situation globally, I would recommend him to invest on Axis Triple Advantage Fund . He can choose a growth option. Now this fund has a mandate to invest equally between equity, debt and gold. So if this is his only investment to begin with, he can choose this fund and then track it over a period of time and take a call accordingly after two years from now.
No comments:
Post a Comment