Market is very high. How should I invest Rs 10 lakh?

I want to invest Rs 10 lakh in mutual funds. I am planning to invest for 10 years. I have moderate risk and I am expecting 12-15% returns. As the market index at high, how to invest the lumpsum?

--- Saurav Chakraborty

You are right that the benchmark index for the market is very high. In fact, it touched the all-time high recently. However, you should not think that all the stocks are at their high or there are no stocks to buy in the market to make good returns. Market still has stocks that are underpriced. A good fund manager will be able to pick such stocks.

All you have to do in such a market is invest in a good fund and wait patiently for good returns. However, 15% returns is very high. According to many fund managers, 10-12% is realistic returns to expect from the market.

Also, it is a good strategy to stagger your investments when the market is at a higher level. It will help you to avoid buying stocks at higher prices. Staggering your investments will also help you to average your purchase cost.

A moderate investor is typically asked to invest in flexi cap funds. These funds can invest across all market segments as they do not have any restrictions on their investment universe. They invest in any sector or theme based on the view of the fund manager. If you want to reduce risk and diversity, you can also invest in large cap funds. Do not invest in more than two or three funds.

Best flexi cap mutual funds to invest in 2021
Best large cap mutual funds to invest in 2021