I am a 26-year-old guy who would like to invest Rs 15,000-20,000 every month as SIP in mutual funds. My goal is to accumulate enough money for downpayment for a house in may be six to eight years down the line. I also have a plan to buy a car after around three years. Please suggest me how I should divide my investments and how many funds should I invest. I plan to stay invested for a long time and can take risk.
As a rule, you should invest in debt mutual funds to achieve your short-term goals. That means you should invest in a debt mutual fund to create a fund to buy a car in three years. You may consider investing in one or two short duration mutual funds.
Best short duration mutual funds to invest in 2019
When you are investing for a long-term goal, you should choose a mutual fund based on your risk profile and investment horizon. For example, if you are new or conservative equity investor, you should invest in large cap mutual funds. If you have a moderate risk appetite, you should invest in multi cap mutual funds. If you have a very high risk appetite and withstand high level of volatility, you may consider investing in mid cap and small cap mutual funds.
Here are a few useful link:
Best large cap mutual funds to invest in 2019
Best multi cap mutual funds to invest in 2019
Best mid cap mutual funds to invest in 2019
Best small cap mutual funds to invest in 2019
How much you should invest to achieve your goals depend on the value of your goal. Try to quantify your goal, and put together a plan to achieve them. If you are investing for a very long-term goal, you should also take into account the impact of inflation on the value of your goals.