I have Rs 2 lakh that I do not need for the next six months. The equity markets are on the rise, should I put this money in equities?
Jatin Shah, Vadodara
The temptation to invest in equities when the markets are rising is palpable. However, for the time period you mention, it is advisable that you put your money in liquid mutual funds or ultra short term debt mutual funds. These are highly liquid investments from which you could withdraw within a couple of days from the date you requisition the redemption. Investments in equities are best for a 3-5 year time period at the least, especially when you understand the risks associated with equity investing. For the time period you have mentioned, if you do invest in equities you will attract capital gains tax.
