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Expose more to risk if you do not have short term goals!

If you do not have any financial responsibilities which you have to fulfill in the next 1-3 years, it is best you direct your investments to higher equity exposure. Assuming that you are in your late 30s and have kids who are in their primary classes and have your own house by now, no loan repayments, saving for your child’s higher education, marriage, buying another big house etc will most probably be your financial goals.

The most important thing that you need to be careful about when setting aside an amount to invest is to check the rate of return and the current inflation rate. If the rate of return is more than the inflation rate then, your corpus can cater to all your needs in future. But if it is not then, considering the rise in the current inflation rate now and then, you might need to avail a personal loan or a credit card to finance the gaps for achieving your goals.

This pursuit might not seem very enjoyable as it can increase the burden on your finances unnecessarily. Be a rigorous investor. Try to take the advantage of the current markets’ behavior. You can start off by investing in SIPs. Limit yourself to few funds and spread your risk between diversified, large-cap, mid-cap and equity-oriented.

Once you have invested in these financial assets, review and re-balance at least once in a year, so that you can rectify any major changes that can pull down the value of your investments.

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