I am 25 years old earning Rs 25,000 every month and plan to invest Rs 5,000 every month through SIPs. Which is the best fund to invest in?
Anjali Mukherjee, Bangalore
You have age on your side to benefit from long term systematic investing through SIPs. Once you have arrived at the time frame for which you are planning these regular investments, you should assess your risk tolerance. Having arrived at a suitable investment time frame and risk that you are comfortable taking, decide on an appropriate asset allocation (mix of equity and fixed income). The next step is to select funds from our Stellar List of funds that you could invest in depending on your need to save taxes or growth or conservative growth as the objectives. The tax saving option is more likely to be suited to your need, a fund like DSPBR Tax Saver could be considered. These are funds in which investments have a three year lock-in for every SIP instalment. Make sure you understand the implications of such an investment, which basically means every SIP has a three year lock-in, before you can redeem it.
