Happy Women's Day! Here's how young women can build their portfolio

•> Retirement planning is the primary goal any individual should set. It is more important than any of the short-term goals. The power of compounding helps build larger corpus with small investment over long period of time. As the time horizon of the investment is long, one can invest 100 percent of the corpus in equity.

•> Saving for buying a house: One can allocate 40% to equity and 60% to debt - to build a core corpus for down payment of house over 5-10 years period. The allocation can be increased to equity, depending on the time horizon one perceives.

Medium-Term Goals:

•> Saving for planned expenditures like holidays, marriage, car etc. will depend on the time horizon. Considering it will be short to medium term, the allocation of this portion of the savings can be invested in debt mutual fund of maturity of up to 3 years.

Short-term Goals:

•> Building of an emergency fund (minimum amount of 6 months salary). This can be invested in a liquid fund or any debt mutual fund of duration of upto one year or a combination of both.

Insurance:

Medical insurance, including critical illness insurance) is a necessary expenditure. Even if one is covered under company insurance, it is always prudent to have personal medical insurance. In case, one has dependents, investing in term insurance is must.

Finally, planning and investing is not a one-time job. One needs to review it regularly and be aware of the progress of one’s investments & goals.

The author is Senior Fund Manager at Reliance Mutual Fund.

Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.