Get in touch
Get in touch
Mutual Funds to meet Financial Planning Goals
Everyone has financial goals that are unique to them and their financial needs. You may want to own a home, a bigger car or fund your child’s education or have a financially protected retirement. Your goals may be a mix of short-term, mid-term and long-term goals. These goals, in turn, determine the amount of savings you need to create and how you need to invest to attain the desired goal amount.
Moreover, with everything becoming more expensive, investment in traditional instruments might not live upto your expectations. This is where investments in mutual funds can be beneficial. Whatever your goals might be, there are mutual funds to help meet them. The mutual fund basket has something for everyone whether you are a conservative or aggressive investor, have a short-term and long-term goal and have a small or large amount to invest. You can use different kinds of mutual funds with different investment objectives to reach your goals.
Choosing the right mutual fund, hence, becomes the first important step in achieving your financial goal.
Let us look at some common goals and the most suited mutual fund options to invest in for these goals.
Common Goals Most suited mutual fund category Time Horizon
Retirement Equity diversified mutual funds, sector or thematic funds Long-term
Tax planning Equity Linked Savings Scheme Medium (3 years lock-in) to long-term
Child’s education and marriage Balanced funds, index funds, gold funds Long-term
Saving for an overseas holiday, buying a car next year or saving for home renovation in one or two years short-term gilt funds, short- to medium-term debt funds Short-term
Regular payouts MIPs Medium to short-term
Why mutual funds are ideal to achieve financial goals
You can use mutual funds to create a diversified investment portfolio that meets your long-term and short-term financial needs. However, one should ensure that there is sufficient diversification or spread of investments across the chosen mutual fund schemes.You should also take into account the risks and avoid under or over allocation in a particular asset class.
Mutual funds also offer asset allocation funds that can mirror your life-stage and progressively reduce the exposure to volatile assets and move to more stable options as you grow old. These funds are a good option if you want to leave the rebalancing of your asset allocation to the fund manager.
All in all, you have a variety of mutual funds to choose from, each with a different investment objective. Further, you can leverage mutual fund investments to instil financial discipline and meet your financial aspirations in a structured and timely manner.
Take a Quiz
Get in touch
You can choose different kinds of mutual funds to plan towards different financial goals.
Make your decision depending on the time horizon, your willingness to take risks, and the liquidity offered by the fund.
Once you have chosen a type of fund, you can compare the performance of the funds within that type to choose a fund that can help you meet your financial goal.
Go to Navigation