Children’s Day special: When to start investing for your child’s future?
By Rahul Oberoi
NEW DELHI: It’s never too late to start investing for your child.
Keeping that in mind, there are couple of investment options, including mutual funds, equities, gold and real estate, among others that can help you to accumulate a decent corpus for your child in the long run.
If you have not yet started investing for your child’s future, go ahead and start it now, as money needs to be compounded to multiply wealth over a period of time.
For instance, equities have delivered over 1,000 per cent return over the past 15 years. Those who waited for the right time to enter stock market might have missed some gains during the period.
The 30-share Sensex has surged from 2,960 on November 13, 2002 to over 33,000 at present. Select equity mutual funds have also delivered over 15 per cent annualised return in the past 10 years.
Gold prices have jumped from just nearly Rs 5,000 in 2002 to nearly Rs 30,000 at present, indicating a rise of 500 per cent in 15 years.
When asked about when should one start investing for a child, Dhirendra Kumar, CEO of Value Research in a chat with ETNow said, “As early as possible in fact even before the child is born because for such long term goals money needs to compound. If you give time to your investment the magic of compounding will work.”
Kumar further advised that investing for the next 15-20 years, you have to go with equity and investing in multicap funds is the simplest thing that you can do.
One can also start a systematic investment plan (SIP) for a child and increase the amount if possible.
Kumar said, “Choose a multicap fund, this is the simplest way where you can diversify and make sure that you are investing regularly. My choice of multicap funds are Franklin India High Growth Companies Fund, ICICI Prudential Value Discovery Fund and SBI Magnum Multicap Fund. These three funds follow a different strategy but they carry a fairly diversified portfolio and mixing two of these three funds will actually help you achieve superior diversification.”
Those who want to take direct exposure in equities. Nitasha Shankar, Senior Vice President and Head of Research, YES Securities believes Symphony and Future Retail can double wealth in the next 3 years. Axis Securities sees 100 per cent rise in Steel Strip Wheels, Dilip Buildcon and Mold-Teck Packaging.
While commenting on gold, Kunal Shah, Head of Research, Nirmal Bang Commodities said, “It is the right time to start accumulating gold.”
Ahammed MP, Chairman, Malabar Gold & Diamonds said, “Geopolitical tensions around the North Korean issue are supportive for the gold.”
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Via:: Economic Times – Stocks