Long-term investment options for a working woman

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I am a 30-year-old working woman. Currently, I invest Rs 10,000 every month through SIPs (for three years) in equity schemes. I invest Rs 1 lakh every year in PPF. Also, I have an LIC policy with monthly premium of Rs 3,400 for seven years. FDs currently have low interest rates, so they are not feasible now. I would like to know about other good investment options I can invest for long-term wealth creation.
- Shradha Sabherwal


Equity schemes or schemes that invest in stocks are considered ideal to achieve your long-term financial goals. This is because of two reasons. One, stocks have the potential to offer inflation-beating post-tax returns. Two, countless studies have proven that equity beats all other asset classes over a long period. So, you must consider investing in equity schemes to reach your long-term financial goals. Of course, you should invest in them only if you have a high risk appetite and mental make up to withstand the regular ups and downs in the market. Remember, many people start dealing with the volatility in the market when they continue with their investments over a reasonably long period.

However, it is extremely important to choose equity mutual fund categories that are suitable to you. In other words, you should invest in mutual funds that are in line with your risk profile. For example, if you are a conservative investor, you should invest in large cap mutual funds. Multi cap schemes were recommended to investors with moderate risk profile. However, after the change in the investment mandate, multi cap schemes have become risky. If you have higher risk appetite, you may consider investing in mid cap and small cap schemes.


You can also invest in US -dedicated international funds if you want to diversify your mutual fund portfolio. Similarly, you can also take a small exposure (5-10% of your total portfolio) in gold. It will add stability to your portfolio. For short-term goals, you must stick to bank deposits and debt mutual funds. You should never invest in equity mutual funds unless you have a minimum investment horizon of five to seven years.

Always identify your long-term financial goals. Find out the current cost of those goals. Calculate the target corpus by providing for annual inflation. For example, a goal that costs around Rs 50 lakh currently will cost Rs 1.38 crore after 15 years due to impact of annual inflation of 7%. Assuming an annual return of 12%, you need to invest around Rs 27,350 every month to create Rs 1.38 crore in 15 years. Note, this is a rough calculation. If you are not clear about basics of investing, you should seek the help of a good advisor.
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