Invest proper and double your cash in eight yrs

I’m 40 and am trying to construct a toddler schooling corpus with a lump sum of ₹13 lakh acquired on maturity of a set deposit. What mutual funds ought to I make investments the sum in full or partly to generate an honest corpus in eight years?

—Kirtivardhan Deshpande

If invested proper, and if the market cooperates throughout the subsequent eight years, you may greater than double your cash on this interval (assuming a 10-12% annualized returns). There are two keys to doing this proper —one is the place to speculate, and the opposite is how.

In phrases of the place to speculate, we first resolve on an asset allocation ratio to your portfolio. Given the eight-year time-frame, a 80:20 equity-to-debt allocation can be a very good match. As you close to the aim, say in one other 5 years, you would wish to e-book your returns from the fairness portion of the portfolio to safe it.

Regarding tips on how to make investments, you may make investments the debt portion straight away.

However, for fairness, make investments over 12 to 18 months to keep away from market timing danger.

Srikanth Meenakshi is founder, Primeinvestor.in.

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