Valentine’s Day 2017: Wanted to buy something for your girlfriend/wife or take her on a fancy trip, but could not do so for want of funds, simply because you found the price of that product too high which was not in your budget? Don’t worry. It is not the end of the world. Anyway Valentine’s Day is not the only day when you can express your love for someone. There will be many other occasions going ahead for doing that, and in a better way. You just need to prepare yourself for that Big Day and start saving for that from today itself.
Mutual funds are a good option for you. Investing in mutual funds will make it possible for you to generate a good amount of money for your future need. The early you plan, the more corpus you can create for celebrating the next Valentine’s Day next year and so on. Your additional expenses can also be controlled while investing your savings through mutual funds.
Here are five different schemes where you can invest your money:
Liquid Funds
Liquid funds are a type of mutual funds that invest in securities which have a maturity of up to 91 days. Assets invested are not held for a long time as liquid funds do not have a lock-in period. They can be easily redeemed any time. You can generate approximately 7% to 9% of return annually or even more as per market conditions. Returns are not guaranteed as the performance of fund depends upon how the market performs.
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Diversified Funds
It is an investment fund that contains a wide variety of securities so as to reduce the amount of risk in the fund. This mainly spreads the risk into various sectors which help risk-averse investors to take exposure in a mutual fund. Actively maintaining diversification helps in preventing the events that affect one sector from affecting an entire portfolio of an investor, likely reduces heavy losses if market conditions tend to go wrong. These are good funds to invest your money. It also provides better returns than liquid funds.
Balanced Funds
A balanced fund combines debt and equity stocks equally, which is generally a bond component or sometimes a money market component. These hybrid funds stick to a relatively fixed mix of stocks and bonds mainly in 50:50 ratio which reflects either a moderate, aggressive, or conservative, or higher fixed-income, component orientation. These funds are beneficial for those who are always unsure about making an investment either in risky funds or less risky funds. They also offer good return compared to other liquid funds.
Large Cap Funds
Lap cap funds are the funds which comprise of blue-chips companies with large market capitalization. However, the criteria of being a large cap vary from company to company considering their huge market capitalization.
There are a variety of mutual funds available in the market which can be opted from financial services companies. These funds offer stability and sustainability with slightly fewer returns as compared to diversified funds and small /mid cap funds under normal conditions. These funds also help in generating a good corpus for you in the long term.
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Mid/Small Cap Funds
These are the funds which are very risky in nature, but provide exceptionally high returns because these funds comprise of small and emerging companies funds which provide very returns. Generally, these companies have low market capitalization. Someone who is very aggressive in taking risks can invest into such category of funds. These funds offer highest returns under normal conditions as compared to other categories of funds. It is one of the best funds to generate money for the coming Valentine’s Day.
Suggestion:
Investing in mutual funds gives your investments a multiplier effect which means the more is the number of years you are invested in, the more corpus you can create due to the compounding effect. Therefore, if it is not necessary for you to take the money out for the next Valentine’s Day from your investments, then let it remain invested and let it grow for the future one coming. As you can see that Valentine’s Day has become your short-term financial goal for which you want to create a corpus, similarly, you may also have some other financial goals in life which can be planned out before time. Therefore, it is always necessary to take proper guidance from your financial adviser before investing.