Q. I am 24 years old and working in an MNC with a monthly salary of about ₹33,000. How should I utilise my monthly savings (about ₹10,000) by way of investment? Can you please provide the necessary guidance?

Amit Gujral

A. If your provident fund is satisfying your tax-saving need, then you can look at superior market-linked investment options like mutual funds, given that you are young and can handle risks. If you still need to save tax, use the tax-saving fund (ELSS) route to investing in mutual funds. Otherwise, go with a basket of open-ended diversified funds with some mid-cap funds and about 20-30% in debt funds. Use a systematic investment plan (SIP) — whether for a tax-saving fund or regular funds.

Invest regularly and do not stop because the markets are correcting or look expensive. Trying to time the market is futile and averaging by investing throughout makes for a smarter approach.

(The author is head, MF research FundsIndia.com)