Why Young Investors Should Opt For Equity Schemes

Young investors should be investing and not speculating, according to Nimesh Shah, managing director and chief executive officer of ICICI Prudential AMC.

There are too many people getting into futures and options these days, Shah told BQ Prime’s Niraj Shah. Many people start believing that they are experts when their calls go right and they make some money in the first one or two years, he said. Shah cautioned young investors to “beware of that intoxication that you are always right”.

Instead, he advised them to invest in mutual funds. “Ultimately, it is a person’s call about which brand to trust. But, I myself look at the person, I take a judgement on the person and invest with the person,” he said.

According to him, for an investor like himself, who can take volatility and won’t be worried if the portfolio is down 20%, he would suggest a pure equity scheme—a large-cap or a flexi-cap fund, as it gives the fund manager the choice of investing in large caps or mid caps.

A person who cannot take volatility is better off investing in an ICICI Prudential Balanced Advantage Fund or ICICI Prudential Multi Asset Fund, Shah said. The Balanced Advantage Fund will “give you an allocation to equity, it will give allocation to debt, and it will give an allocation to gold also”, while a multi-asset fund allocates in all three asset classes, he said.

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