Got a hefty Diwali bonus? Here's how to invest wisely
What's the story
As the festive season winds down, many investors are left wondering where to put their money for maximum returns. If you had a sudden windfall of ₹10 lakh during Diwali and want to invest in growth-yielding asset classes, experts recommend a long-term view on equity investments instead of looking for immediate returns. Preeti Zende, a SEBI-registered investment advisor and founder of Apna Dhan Financial Services, says having just a one-year view on equity investments is not advisable.
Investment approach
Avoid putting entire corpus into 1 stock or fund
Experts suggest that retail investors should not put their entire ₹10 lakh corpus into one stock, fund, or asset class. Sachin Jain, Managing Partner at Scripbox, warns that concentrating too heavily on a single bet can lead to significant opportunity loss and portfolio instability if the call goes wrong. He emphasizes asset allocation as the true mantra for sustainable wealth creation.
Market volatility
Diversification is key to stable returns
Zende echoes Jain's sentiments, noting that retail investors have faced substantial volatility in the stock market over the past 18 months. She suggests diversification across different asset classes as a way to make profitable investments. This strategy could help mitigate risks associated with market fluctuations and ensure more stable returns over time.
Investment allocation
Focus on blue-chip stocks, mid-cap mutual funds
Experts recommend that a major chunk of your corpus should go toward blue-chip stocks, with a smaller allocation to mid- and small-cap mutual funds. Om Ghawalkar, Market Analyst at PhonePe Wealth (Share.Market), suggests retail investors should focus not just on established blue-chip stocks, but also well-managed mid-cap innovators within high-growth themes before they become market darlings.
Expert advice
Suggested asset allocation for retail investors
Experts suggest dividing the ₹10 lakh corpus among different asset classes with 50% in flexi caps, 30% in mid-caps, and the rest 20% in arbitrage funds or money market funds. Zende recommends allocating around 50% to diversified equity mutual funds like flexi-cap and multi-cap for long-term goals such as retirement and education. She also suggests allocating 30% for mid-term goals in aggressive hybrid funds, debt funds, gold or silver ETFs.