Where should I invest for my daughter's future needs which is 15 years away?
You should consider investing regularly using the systematic investment plan (SIP) for long-term wealth creation
My wife received Rs 5 lakh as gift from her brother and wants to invest this sum for our daughter’s future needs which is 15 years away. Please advice a fund to invest this sum.
Raghav Kundra, Chandigarh
Ideally you should consider investing regularly using the systematic investment plan (SIP) option for long-term wealth creation. When investing in lump sum; you run the risk of ill-timing your investment and catching, what could be the peak of the market and paying more for the number of mutual fund units you acquire. However, if you invest through SIPs in a fund, you average your acquisition cost over a period of time with the possibility of adding more units. The risk when investing through SIPs is far lower compared to investing in lump sum.
You should park the Rs 5 lakh in a liquid fund or let it be in your bank account and start a SIP investment in equity mutual funds from OLM Elite based on the risk profile that best defines you. You could invest in 2-3 funds and review the performance of the funds that you invest in once a year to assess the progress made by your investments as well as balance your portfolio to stay with the asset allocation that suits you.