This was highlighted in a recent investor question from Dheeraj Kumar, a 50-year-old professional, investor and viewer of Money Show on ET Now, who wants to start investing Rs 40,000 per month in mutual funds. He described himself as someone who is not familiar with managing market risk and prefers portfolios with moderate risk.
Also Read | Women own only 25% of mutual fund portfolios, start investing 5 years later than men: report
Responding to a question, Pankaj Mathpal, CEO, Optima Money Managers said, while understanding market risk is important, mutual funds are managed by professional fund managers who actively manage investments and try to control risk within the scheme.
“As he does not know how to manage the market risk, it is very important. But the most important thing is that when you invest in a mutual fund, you should know that the fund managers are also doing this job for you. They are trying to manage the risk, but, at the same time, the choice of fund should be right and the schemes you choose should be in accordance with your financial goals.”
According to Mutpal, investors should focus on choosing the right mix of funds based on their financial goals and investment horizon. In this case, the investor has not specified a goal or a specific financial goal. However, considering his age, Mutpal thought he could invest for at least five years or possibly longer.
For someone new to equity-linked investing and looking for moderate risk, he suggested starting with a mix of hybrid and diversified equity funds.
“To begin with, some hybrid funds like multi-asset allocation or dynamic asset allocation funds, flexi-cap funds and index funds can be a good starting point for him.”
Mutpal suggested starting with schemes like ICICI Prudential Balanced Advantage Fund, White Oak Capital Multi-Asset Allocation Fund, HDFC Flexicap Fund, and SBI Nifty Index Fund. These funds represent a variety of investment styles, including dynamic asset allocation, multi-asset exposure, actively managed diversified equity and passive index investing.
Also Read | Women’s Day 2026: India’s Top 3 Women Portfolio Managers. See how they move over market cycles
Hybrid funds such as balanced interest or multi-asset allocation funds can help moderate risk by spreading investments across different asset classes such as equity, debt and commodities. Flexi-cap funds allow fund managers to invest in large-cap, mid-cap and small-cap companies depending on market opportunities. Meanwhile, index funds track benchmark indices at a lower cost to the broader market.
Mutpal also highlighted an important aspect of behavior for new investors: patience. Markets are expected to remain volatile at times, he advised investors not to track their portfolios frequently.
Instead, investors should remain disciplined with their investments and review their portfolio periodically rather than reacting to short-term market movements. “Once you start investing, be patient, invest and once a year you can review your portfolio, but your goal should be long-term,” he said.
For investors starting later in life, consistency and realistic expectations become even more important. A structured SIP approach, a diversified portfolio and regular but not excessive monitoring can help investors manage market volatility gradually over time.
One should always consider their risk appetite, investment horizon and objectives before making any investment decision.
((rejection: The recommendations, suggestions, opinions and views given by the experts are their own. (It does not represent the views of The Economic Times.)
If you have mutual fund queries, message ET Mutual Fund on Facebook/Twitter. We will answer it by our panel of experts. Share your questions with us ETMFqueries@timesinternet.in Along with your age, risk profile, and Twitter handle
As a credible and reliable news source
