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Ask Mint Money | Srikanth Meenakshi
Srikanth Meenakshi | Founder and director, FundsIndia.com

I want to invest Rs 5,000 each in two mutual funds (MFs) for 15 and 20 years, respectively. Please suggest me some funds.
- Vijay Kumar

It is good that you are thinking long term for your mutual fund investments. Presumably, you have some financial goals that you intend to meet with the proceeds of this investment. However, you have not indicated your age or how risk averse you are. So, we will go by the time frame that you have indicated and assume that you can take moderate risk. Even riskier investment options, typically, work in the investor's favour in the long run.

We'll go with a large-cap fund for one of your investments. You can choose between or split between DSP BlackRock Top 100 Fund and HDFC Equity Growth. For the other Rs 5000, you can consider small - or mid-cap funds such as Birla Sun Life Mid Cap A Growth or Tata Equity P/E Growth.

I am 35 years old and have many MF investments. I intend to remain invested for 10 years. Should I book some profits now since the markets are high or let the investments be?
- Magesh. R

When we deal with a long-term investment (at least five years from today), any profit-booking strategy will need to be accompanied by an alternative investment and re-entry strategies. Simply put, what will you do with the redeemed money and how will you re-enter the market with this money?

If we keep the redeemed money in "safe" instruments, we are short-changing ourselves with respect to market gains. It also defeats the principle of compounding-the money needs to stay invested in the market for it to compound. Redeeming removes it from the investment equation.

Similarly, how do you decide when to enter the market? Suppose the market goes from here to, say, 23,000 points and then corrects to 17,000. Will we enter the market at 17,000 (we won't know if we have hit the bottom at that time) or at 21,000 (which is higher than it is today, which means we would have sold low and bought higher).

Therefore, leaving the money where it is would be the correct option. But gradually reducing equity exposure before withdrawal would be prudent.

I am 32 and want to save for my 1-month-old daughter. I can invest up to Rs 10,000 per month for 10-15 years. Should I put 60% in equity and 40% in safer options? Suggest some good schemes.
- Prashanth

Given your time frame, the 60:40 allocation is a bit on the conservative side. We would recommend a 80:20 split, but do what is comfortable for you.

You can consider HDFC Top 200 Growth, DSP Blackrock Top 100 Growth and DSP BlackRock Small and Midcap Growth schemes. For debt funds, you can choose from HDFC High Interest Short Term Growth and Templeton India Short Term Income Growth.