How to invest 50K to 1 Lakh monthly in Mutual Funds? (for beginners) | Akshat Shrivastava

Summary

This video provides a comprehensive guide on how to invest in mutual funds with a focus on practical strategies for 2025. It discusses the importance of assessing market conditions, selecting the right types of funds (large-cap, small-cap, hybrid, international), and knowing when to exit. The speaker emphasizes the need for diversification, profit booking, and understanding personal risk tolerance. For a balanced portfolio, 50% should be allocated to large-cap funds, 30% to international investments, and 20% to unlisted stocks. The strategy is ideal for those looking for growth and protection in the current market environment.

Takeaways

• 😀 **Set Clear Return Targets**: For beginners, aim for an annual return of around 12-15%, depending on risk tolerance and market conditions.
• 😀 **Expense Ratio Matters**: Look for funds with low expense ratios to maximize returns, especially in actively managed funds.
• 😀 **Don’t Put All Your Money in One Type of Fund**: Diversify between equity, debt, hybrid, and international funds to balance risk and reward.
• 😀 **Understand Market Conditions**: If the market is overvalued, avoid sectors like small-caps that have seen excessive growth and are likely to correct.
• 😀 **Regularly Review Your Portfolio**: Ensure that your asset allocation is aligned with your goals and risk profile. Rebalance if necessary.
• 😀 **Know When to Exit**: If a sector or fund has had a significant rally or if your portfolio is too equity-heavy, it might be time to take profits and reallocate.
• 😀 **Use SIPs for Long-Term Growth**: Systematic Investment Plans (SIPs) help smoothen the impact of market volatility and create wealth over time.
• 😀 **Large-Cap Funds Are a Safe Bet**: For stability, invest a significant portion in large-cap funds like Nifty50, especially for new investors.
• 😀 **Diversify Internationally**: To hedge against INR depreciation, consider putting a portion of your investments into international funds (about 30%).
• 😀 **Unlisted Stocks Offer Growth**: Allocating a smaller portion (20%) to unlisted stocks can yield high returns, especially if you pick promising companies that are likely to IPO.
• 😀 **Avoid Over-Investing in Equities**: If you feel stressed tracking your accounts daily or see excessive market exposure, it’s time to book profits and reduce risk.

Q & A

What happened to Quant Mutual Fund's performance in 2024?

Quant Mutual Fund, which was one of the best-performing funds in 2021-2023, faced a downturn in 2024. Some of its schemes actually lost money, with an average 1 lakh rupees investment shrinking to 90,000 rupees, showing a loss rather than the expected growth.

What is the general myth about mutual funds that the speaker challenges?

The speaker challenges the myth that simply investing in the best-performing mutual funds and continuing SIPs (Systematic Investment Plans) will lead to significant long-term growth. While it might work in some cases, the reality can often be less profitable, especially if the market conditions change.

What are the three key things the speaker plans to discuss in the video?

The speaker plans to cover three key topics: 1) the right type of mutual funds to pick, 2) when to exit mutual funds, and 3) a strategy for investing 50,000 to 1 lakh rupees on a monthly basis in mutual funds.

What are the five key factors to consider before investing in a mutual fund?

The five key factors are: 1) Understanding the return target of a mutual fund, 2) Checking the expense ratio, 3) Being aware of the current market situation, 4) Deciding on the type of mutual fund (equity, debt, hybrid, etc.), and 5) Ensuring the mutual fund fits well with your overall portfolio.

What is the significance of the expense ratio in a mutual fund?

The expense ratio indicates the cost of managing the mutual fund. For instance, if you invest 10 lakh rupees, a 0.5% expense ratio would mean the fund manager charges 5,000 rupees. Lower expense ratios are preferred as they reduce the overall cost of your investment.

How does the speaker suggest selecting a mutual fund based on market conditions?

The speaker advises considering market conditions when selecting a mutual fund. For example, if small-cap and mid-cap stocks are likely to perform well, investing in those sectors may be profitable. However, if the market conditions are not favorable, it might make more sense to stick to safer, larger-cap investments.

Why does the speaker recommend a mix of equity and direct stocks in your portfolio?

The speaker recommends a mix to balance risk and potential return. While mutual funds can offer diversification, direct stocks can provide more control and flexibility. This approach also helps with knowing when to exit investments and understanding the risks involved.

What types of mutual funds does the speaker recommend for a new investor in 2025?

For a new investor, the speaker recommends focusing primarily on large-cap mutual funds like Nifty50 because they typically have lower expense ratios and better performance over time compared to actively managed funds. Additionally, 30% of the investment should go towards international stocks and 20% into unlisted stocks.

What strategy does the speaker recommend for investing 1 lakh rupees today?

The speaker suggests investing 50% in large-cap mutual funds (preferably Nifty50), 30% in international stocks to hedge against INR depreciation, and 20% in unlisted stocks, which can offer higher returns but come with greater risk.

When should you consider exiting a mutual fund according to the speaker?

The speaker recommends considering an exit from a mutual fund based on four factors: 1) When the overall market is overvalued, 2) When the segment you're invested in is overvalued, 3) If you're over-invested in equities, and 4) If there are better investment opportunities elsewhere.