A long investment horizon allows mutual fund investors to benefit from compounding, but reaching a specific financial goal also requires careful portfolio planning. For a child’s higher education, investors need to focus on wealth creation in the early years while gradually reducing risk as the goal approaches. This is especially important over a 15–20-year horizon, as staying fully invested in equities until the final year can expose the corpus to a sharp market correction.
A 36-year-old investor with a moderate-to-high risk appetite reached out to ETMutualFunds to build a Rs 1 crore corpus for his child's higher education over the next 18 years.
