How to meet life's key milestones through mutual funds

Mutual funds offer a disciplined and flexible way to achieve life milestones like education, marriage, home ownership, and retirement. With diverse investment options available n mutual funds that are tailored to risk and goals, they enable systematic wealth creation. Start early, invest consistently, and let compounding work to secure your financial future and fulfill cherished dreams.

- Sanjeev Puri

The three primary milestones in life are arranging a home loan, creating a corpus for children's needs, and accumulating funds for retirement. Assessing these goals, estimating their worth, and selecting the right asset mix are crucial.

A prudent mix of different asset classes is necessary to achieve these goals, although reliance on equity should be prioritized, particularly if the target is at least seven years off. To fully realize the potential of equities, it is best for retail investors to limit their investments to equity mutual funds.

Among all asset classes, equities has the potential to produce high inflation-adjusted returns over the long run, according to a number of prior research. / As an asset type, debt also contributes to the attainment of objectives. Invest in debt mutual funds to reach goals that are one to three years away or during the de-risking process as a goal approaches, as debt has less volatility than stocks.

Balanced funds with a combination of debt and equity assets are useful for goals that are around five years in the future. The systematic investment planning (SIP) strategy is the best way to save for any goal since it keeps expenses down and encourages saving discipline.