Every investment needs a time to grow.. If you are investing for child’s future then it’s better you invest as early as possible & let your investment grow as your child grows.

a delay of just one month can cost you Rs. 1 Lakh.

to get meaningful return from your investments you need to remain invested for a reasonably long time. Many a times market linked investments like mutual funds do not create any meaningful returns in 5 years, in such case investors compare these investments with other guaranteed return schemes & eventually withdraw from Mutual funds. Here are some funds with past annual performance.. where some years investors have made big returns & some years have not made any return or even negative returns..

Please be informed that all abovementioned funds have different Debt/Equity ratio & also have different Mid/small/Large cap equity strategy hence wide difference in performance/Volatility.

Some investors invest only in Guaranteed schemes & on other hand some investors are so bias for market linked mutual funds / equities that they refuse to have guaranteed return scheme as part of portfolio..

As an investor you need to rational.. & must invest some portion of portfolio in guaranteed return scheme. Earnings from these scheme can be utilised for consumption & your thus you can give more time to your market linked investments to grow.

Also with passing age you need to reduce your market dependency, these scheme help you to achieve.

Your debt exposure % should be equal to your Age in years. thus if you are 45 years then suggested part of debt portfolio is 45%.You may adopt a different debt/equity ratio, provided you are prepared for worse case scenario.

Inflation is silent killer..

Value of Rs.1,00,000/- will stand reduced to just 50,000 in 15 years… & Rs. 25000/- in 30 years..

Following table shows decreasing value of 1,00,000/- over period of time, assuming 5% inflation, on other side cost of education would rise higher than inflation rate.

Assuming 8% rise you need 3 times of today’s cost i.e. 3,00,000/-

Now you need an investment which earns enough to cover this inflation..

Some times some events happens exactly when they are least expected.. It could be

1. Death of earning member / members of the family.
2. Medical emergency of family member/members.
3. Stock market fall.
4. Natural Calamities.
5. Some unpleasant events.

Most of the times you can’s stop these events from happening but you can secure your family from effect of these events. e.g.

1. A life insurance cover can help family financially to stand again
2. Mediclain Policy can cover cost of medical treatment.
3. Enough debt exposure to address daily cost till stock market recovers.
4. Having insurance cover for different assets.
5. Having Personal accident / critical illness cover for family & dependents.

You need to pay a little cost of all these covers but ultimately it proves to be needful at most critical time.