Investors investing in mutual funds for the first time have incomplete information and most of them are affected by uncertainties coming in the investment circumstances. But there are more important things in the mutual fund investment than the market times that should be taken care of.
Keep in mind first
An ambitious unit holder should first decide what type of portfolio he wants to build (Investment List). In other words, he should decide the proper appropriation of his property. This is called asset allocation. Asset allocation is the method that determines how to put your money in various investments, which will be the proper mix of all the classes of property.
However in reality, each person may need different investment allocations in accordance with the different circumstances and financial condition. To understand the asset allocation, you should also be aware of various factors such as age, business, number of family members dependent on you etc. Usually, the more you are young, the more risky investments you can keep, the better the returns you get.
How to choose the right fund
Keep in mind to choose the right fund – the key to choosing the right fund depends on their investment theory and the stability of giving returns. To make sure you choose the right funds that are suitable for your needs, consider the following:
- Set your financial goals.
- Are you investing for your retirement? Or for your child’s education, or for current income?
- Consider your deadline. Do you want money in three months or in three years? The more detailed your time, the more risk you can afford to invest.
- What do you think about taking risks? Are you in a position to tolerate the ups and downs of the stock market for the possibility of higher returns? You must be aware of your ability to take risks of your own, it can be a guide to choosing the right investment plan. Remember, without worrying about a possible return, if you are not comfortable with a particular asset class then you should consider other investment options.
- Keep in mind- The direct impact of all these factors is found on the funds you choose and the returns you expect to receive.
- Multiple Equity Funds
- Index funds
- Opportunity Fund
- Mid Cap Fund
- Equity Linked Savings Schemes
- Sector Funds such as Auto, Health Care, FMCG, Banking, I.T.
- Balanced funds do not want to take 100% risk in equity investment
(If chosen correctly, they can give better returns than other property classes).
If you are a long-term investor with the courage to take risks and are looking for a return to defeat inflation, equity funds are the highest choice. Mutual Fund offers various types of equity and equity based schemes (see fund candy). Initially it would be advisable to invest with various funds and gradually you can try out in the field of credit risk and special funds.
Keep an eye
Just filling the application form and writing the check is not enough. It is equally important to keep an eye on how your investments are performing. A qualified and professional investment advisor who can help you both make the right decision and measure your investment performance. At the same time, you should also know how you can help your little help through the following sources.
Fact Sheet & Newsletter
Mutual Funds publish monthly and quarterly fact sheets and newsletters, in which the information of the portfolio, the plans managed by the fund manager and their performance data are published.
The website of Mutual Fund provides performance data, daily NAV (Net Asset Value), Fund Fact Sheet, quarterly newsletter and press clipping etc. Apart from this, India has a website of Mutual Fund Associations (AMFI) which contains information about daily and historical NAV and other plans.
The pages of the newspaper contain information about the sale of mutual fund schemes, NAV and redemption price. Apart from this, there are other economic analyzes and reports too.
It is very important to keep the information you need to know. To get this, you only have to spend a little time understanding the information and analyzing the information. Which is essential for increasing your investment prospects. The amount of time you spend in earning money if you spend one percent of it on it will be a good start. Help these professional advisors to choose the right fund, which is a perfect mix of SIP (Systematic Investment Plan), STP (Systematic Transfer Plan), and one-time investment.