Funding Vacations With Mutual Funds
Invest For Your Holidays
Vacations are non-negotiable just like education and food.
And, investment advisors say funding a vacation is just like investing for any other financial goals - and all you need to do is choose the right MF.
Factor In The Time
Vacations are usually a short-to-medium time goal. Investors should choose an MF based on the time they have.
If your vacation is less than three months away, opt for liquid funds. If you have more time, invest in ultra-short term funds.
Apart from the time horizon, your level of flexibility also matters.
If you don’t have room to go early or postpone your vacations based on the performance of your funds and reaching your desired corpus, you’re better off sticking to liquid funds.
If your vacation is 1-3 years away, stick to ultra-short term funds - they are less risky. Short term funds invest in debt securities with a span of 1-3 years, inviting marginally higher risk.
Ultra short-term funds invest in debt securities for 3-6 months.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.