Due to market fluctuations, lump sum investments can be risky in the short term; however, staying invested can yield better results.
Consider your risk-taking appetite and investment duration before investing.
Investors should determine whether they need periodic income or they can wait till maturity.
Allocate a higher percentage of the investments into passive equity mutual funds, like index funds, if you are a senior citizen.
If you don’t require returns for 5-7 years, you can consider investing in long-term equity mutual funds.
For short-term needs, a larger share of the lump sum should be invested in low-risk instruments like arbitrage and liquid funds.
If you want to avoid taking high risks, follow the reversed approach by allocating more funds to safer options.
Compiled by Syed Muskan.