Start with Mutual Fund and Make Sure I do not lose my Money

This is the statement made by one of my cousins because he was never into stocks and mutual funds but always hear the stories that people lose a lot of money in stocks. He has actually started saving for his daughter and keeping all the funds in an FD which is giving him 6% returns from the last 5 years.

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I guess 2 years back I asked him to move funds to mutual funds slowly so that you get more benefits. He didn't listen, he was thinking of buying a plot, but with covid and other things buying the plot didn't happen and now all the money is sitting in the FD itself. So this year also in January, I have asked him about the same thing. Yesterday he has asked me if he wanted to start with Mutual Fund and make sure that he doesn't lose any money.

He has asked me to manage his portfolio. So, what I will be doing is to get 30% of his FD in a debt fund and then start moving 2% every month to the equity until the equity is around 50% and the debt 50%. He does not want to lose money and because of that, I will not keep more than 50% of his investment in equity. Also in the equity, I will try to keep 70% in index funds which is giving more returns than the regular funds. This is good for me too because whatever I have learned from the last 8 years, I can apply the same thing to his portfolio.

I have also asked about his time horizon, he is looking for investing for more than 5 years which means I can think about it as long term instead of short term. Also since I will be moving the fund to equity slowly like 2% every month then actually I am taking advantage of SIP rather than moving all the funds to equity at once.

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