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Tips for investing in mutual funds for beginners

  • Understanding the Risks Involved: It is crucial to analyze the risks based on your investment opportunities
  • equity funds especially mid and small-cap funds have the highest risk with the highest potential for offering rewards.
  • Read the scheme related documents to learn about the objectives of a scheme, past performance and the time horizon. Ensure that you invest in a right scheme
  • In the long-term, small but regular investments have proven to generate better returns. Take the Systematic Investment Plan (SIP) route and start investing
  • It is ideal to invest early (and regularly) and stay invested so that your money has enough time to grow through compounding. Also,avoid churning the portfolio
  • The mutual fund NAV actually has no bearing on how a fund has performed or will perform in the future
  • scheme with a NAV of Rs. 100 is not necessarily better than a scheme with an NAV of Rs. 10.
  • In case you feel the market is bullish and want your money to grow fast,you could invest in a midcap or smallcap fund which can potentially offer a good return
  • Include Balanced Funds and Index Funds. If you have a predominantly equity-based portfolio, consider balanced funds to lend some amount of cushioning
  • One of the most crucial aspects, that most investors ignore, is about monitoring their investments and examining its performance

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