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Portfolio management: Best investment options for your child. Read here
Experts advise parents to regularly review and rebalance their portfolios to align with their child's goals and market conditions, and consider long-term investment strategies that can accumulate wealth over time
To build a financially secure portfolio for a child in India, you need to consider long-term investment strategies that can accumulate wealth over time. Livemint spoke to some money experts, and all were of the opinion that the sooner you start, the better you will be placed to take advantage of compounding and the power of long-term investing.
“Plan early and have a large allocation in equity funds. If your investment horizon is 10 years and more then you should also include small-cap funds in your portfolio. Invest through the SIP route and step-up your SIP regularly.” said Pankaj Mathpal, MD & CEO at Optima Money Managers.
Smart ways parents should follow for investing in their child's future
So what are the best investment options for your child that would help in creating wealth for his/her future? Let's see what the financial planners have to say on smart ways parents should follow for investing in their child's future.
One should start by setting clear financial goals, such as funding their education or providing for their future needs.
“Set a goal before you begin. A college degree is beneficial for a newborn. Based on the required capital and your ability to pay, choose a monthly SIP amount, and then begin,” said Vinit Khandare, CEO and Founder, MyFundBazaar
Amit Gupta, MD, SAG Infotech stressed on diversification.
“Diversify the portfolio by allocating investments across different asset classes, including equities, bonds, mutual funds, and fixed deposits. Consider equity investments like diversified equity mutual funds or ETFs for higher potential returns,” said Gupta.
Fixed income options such as fixed deposits, PPF, or SSY for stability and regular income can also be considered when building a portfolio for a child.
“Take advantage of education-specific funds like Sukanya Samriddhi Yojana and tax benefits under Section 80E of the Income Tax Act. Invest through a SIP in mutual funds to benefit from rupee-cost averaging,” said Amit Gupta, MD, SAG Infotech
Radhika Gupta, MD and CEO of Edelweiss Mutual Fund has shared 5 precious thoughts about money. She explained the importance of money while emphasising its limitations.
“Five thoughts about money, that I want my child to learn first,”Gupta shared in a tweet dated 11 June.
Experts have advised parents to regularly review and rebalance their portfolios to align with their child's goals and market conditions. If needed, they should seek professional advice from a certified financial planner or investment advisor. Remember to conduct thorough research and exercise caution while investing.
Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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First Published:27 Jun 2023, 01:08 PM IST
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