Why Young Investors Should Not Avoid Debt Mutual Funds

Young people often have many years to invest, so they may be able to hold more equity.

But that does not mean they should put all their money into equity.

Debt investments can make a portfolio steadier and easier to manage when markets fall.

The right mix depends on when the money will be needed, not only on the investor's age.

Money needed for a holiday within a year may be kept entirely in debt.

Money for a wedding in three to five years may use a mix of equity, debt and gold.

Retirement money can usually tolerate more equity because it may not be needed for many years.

Short-term debt funds can offer liquidity, but investors should understand their risks and tax effects.

An emergency fund should mainly be kept somewhere that allows quick access to cash.