People in India are slowly turning towards the increasing trend investment in Mutual funds. Still they are not yet enough informative about it. So, there is a need of a proper awareness program because most of the people’s Mutual fund investment plans are associated with myths and many such sentiments. Also, it needs to be clear in the vision of investor that every mutual fund is not same and doesn’t yield equal rate of return.
Mutual fund needs to be picked as per the individual goals and targets and amount range to be invested. If put smartly, mutual fund can be proved to be a good option for securing one’s retirement whereas if not chosen wisely, it will be of more harm than of being useful. For your guidance you can search for top performing mutual funds in India and choose any 4-5 funds in different segments. For example, You can choose one best performing fund each from Large-cap mutual funds, Mid-cap, Small-cap, Tax-saving & Hybrid mutual funds. This will diversify your investment and risk also.
With an insight of making it a right decision for you, there are 5 things that need to be put high on priority list before investing in mutual fund:-
- INVESTING PLAN (ROAD MAP) IS MUCH NEEDED
Every one should decide their prime financial plan and the goal they want to fulfill with the mutual fund investment. Based on that a particular mutual fund plan should be chose. For every age level there are different priorities. In the age of 20-25 years one must want to buy his own house or may plan for retirement in 35 years. Mostly, what is found is that people usually invest in different mutual funds on the basis of hear-saying of their relatives, colleagues, friends etc. - WAITING FOR “PERFECT TIME”
If you are one of those people who is waiting for perfect time, when it will be most appropriate to invest, then this is your another mistake because mutual fund is not for short term investment and for those who are investing money for long term, their doesn’t exist perfect time to start investing. Only current happenings do not matter us the level of return that fund has caused in previously is equally important. - SHUFFLING YOUR FUNDS
There are a lot of agencies who works for providing us best ratio for same portfolio according to their state. But, it doesn’t mean that you will re shuffle your funds from portfolio to other on every small event such as 1 star reduced rating. Every agency has different ways of calculating. All you need to do sometimes is trust and wait. Do not re shuffle repeatedly in short time span. - INVESTING IN DIFFERENT OPTIONS
In order to reduce the risk factor people believe in investing in a large number of portfolios on the basis of its past performances and that too with comparatively less amount. But, what actually happens is that it’s not important that the profits will go with the requirements or agendas of individuals. So, instead of diversifying, you should focus on the details of the portfolio. It is of no sense to make the process more stressful and to get indulge in for more time. Therefore, invest wisely.
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