Keep emergency money ready before investing in any asset class, says Chirag Mehta of Quantum Mutual Fund
MintGenie, Mehta said that before you begin investing in any asset class, you should keep a financial backup or “Emergency Money" ready to see you through 12 months of expenses. India is one of the fastest growing major economies and the Indian economy is projected to reach $5 trillion in the next few years. We estimate that India will account for 14% of global GDP by 2050.
This will in turn propel domestic businesses. Government capex and reforms have put the economy in an upcycle. At the same time, Chinese companies have been losing market share as the Chinese economy and hence the markets are struggling with the aftereffects of a zero-covid policy and other economic policies.
As such it is reasonable to expect more Indian companies to feature in the top 100 global companies list in the future. Mutual funds are meant to simplify the task of investing, especially for those with no time, inclination or expertise to invest directly in the markets. but with the number of options available these days, choosing the right mutual fund can itself become a confusing, overwhelming task for many.
A simple yet effective 12-20-80 asset allocation strategy can be a good way to start. Before you begin investing in any asset class, you should keep a financial backup or “Emergency Money" ready to see you through 12 months of expenses. Ideally, park this money in a safe instrument with no risk such as a bank savings account or a well-managed Liquid fund.
After setting aside 12 months of safe money, whatever money is left could be split between 80% to Equities and 20% to Gold. When you look at investing 20% in gold, you should ideally choose efficient forms like the gold fund of funds or gold ETFs. This helps negate any worry about its
. Read more on livemint.com
