My daughter is earning Rs 24000 per month and she is 24 years old. She wants to invest Rs 10000 a month. Please suggest some investment avenues.Her horizon is five years.

Question

At your daughter’s age around three fourth of her savings should ideally be allocated to an equity -oriented fund. However ,the decision is dependent  on other factors such as the financial goal,risk appetite and investment horizon.

You have defined five year time horizon which makes equity investment slightly tricky.Further there is no mention of any specific goal or risk appetite.Based on the information you can go with two broader approaches.

First you have a fixed time line and wish to go with a low risk product , then invest Rs 10000 a month in a low duration debt fund or open a recurring deposit account  .A low duration debt fund has no exit load and the money can be withdrawn whenever needed and the return should be more or less in line with regular fixed income options.

Alternatively some amount of risk can be taken ,and part of the investment can be held for around 7 -10 years,then  split the investment into two components-equity and debt.Invest one half in a multi -cap fund and the other half will provide some boost to the overall portfolio.

While you can decide on the break up between equity and debt based on your comfort and goal, do allocate some amount to an equity -oriented fund with a long term view ?

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