I am 27 years old. My salary is Rs 50,000 per month. I want to invest in mutual funds. Could you please suggest me which mutual fund to buy and is it right time to invest?
--Lavanya Pacha
Firstly, your financial goals and the investment horizon would decide the kind of investment you should buy. As a rule, you should invest in a safer avenue like debt mutual funds to meet your short-term goals. You should bet on equity mutual funds to take care of your long-term goals. Equity funds are risky, but they have the potential to offer you superior returns over a long period. However, they are also volatile in the short-term, that is why you can't invest money needed for short-term goals in equity schemes.
For example, for a near-term goal that is a few months away, you should ideally park your money in liquid or ultra short-term funds. For a slightly longer tenure of, say, a year or two, you can either bet on short-term debt funds or dynamic funds.
