Every investor has short-term goals and long-term goals. For the short-term goals, one can consider debt mutual funds, but for longer term goals (3+ years) equity is the asset class you need. There are multiple categories of equity funds and one must consider investing in them based on one’s investment horizon and risk profile. One important category is the Mid Cap Fund. Let us try and understand why one should be investing in this category.
Mid Cap funds invest in companies that are at an early stage of their business cycle and have higher growth potential than other companies. Adding a mid-cap fund to your portfolio for longer term goals gives your investment the opportunity to benefit from the growth cycles of these companies. Not just that, it adds to portfolio diversification too.
Things to keep in mind when investing in mid cap funds
- Don’t get swayed by market volatility – stay invested, keep investing
- Invest for the long term (5+ years)