Should I add debt mutual funds to my portfolio?

I am 23 years old, and investing Rs 6,000 monthly in equity mutual fund schemes directly. I am looking for a long term investment of over 10 years. Do you think I should also include debt mutual funds in my portfolio?
--Kishor Rit

Dinesh Rohira, Founder and CEO at 5nance.com, responds:

A pure equity mutual fund portfolio at your age is reasonable. It can also generate wealth over a period of time. At your age, it is advisable to take aggressive risk as financial obligations are generally limited. However, you should be willing to accept the volatility in portfolio; you should also rebalance your portfolio periodically as you approach your goal.

However, you can include debt funds in your portfolio for your short-term goals that requires safety. You can also include them in portfolio for diversification when you increase the investment amount.


Apart from this investment, you should also create timely budgeting and make provision for emergency fund which should be equivalent to your living expense for six months. It is also prudent to quantify future financial goals. It will allow you to select the right investment asset-class.