MFs and your first salary
I recently started working with one company and I am expecting my first salary by the end of this month. I am a regular follower and reader of your articles and magazine. So I have decided to invest in mutual funds. But I am not sure where to invest. Will you please guide me on the same?
- Pratik Gujar
First of all, it's nice to know that you follow our articles and magazine. People like you inspire us to improve and provide better content which in turn helps you make better investment decisions.
As you said, you are just going to receive your first salary, we would first suggest you set some financial goals so that you can invest accordingly. Though you are young and there is a lot more time to accumulate, we suggest you take an aggressive approach in terms of risk. However, it is advisable that you do assess your risk by solving online questionnaires that are available online on the websites of Asset Management Companies (AMCs).
Based on your financial goals and the risk that you actually can take, you may start investing via Systematic Investment Plan (SIP). So supposing your risk profile comes as balanced and your requirement is for the short-term. Then you may be better off investing in short-term and ultra short-term debt funds. However, if your time horizon is long-term then you would be better off to invest 70 per cent in large-cap and mid-cap equity funds and the remaining 30 per cent in medium-term and short-term debt funds. But it is to be noted that the above set-up is for a person who has assessed his risk profile as balanced. If the person is aggressive then the equity portion would increase and will also include an allocation to small-cap equity funds and corporate bond funds.
In case, you wish to invest right away and just want to first experience an investment in mutual funds then you would be better off investing in Hybrid - Aggressive category funds which have minimum 65 per cent in equities and remaining in debt instruments. This is relatively less risky than a direct investment in equity mutual funds.