Mutual Fund Investing Strategies – Investment Expert Advice for Beginners
The best way to invest in share market is to invest in mutual funds. Many times many investors make lots of mistakes while investing in mutual funds. However, you can take help of fund managers in such situations. Fund managers are professionals that have their own research team. They take correct decisions for investments. Chances of loss decrease when we take help of such professionals.
SEBI regulates the mutual funds. Chances of fraud decrease in such case. This is the reason that whenever somebody plans to invest they are suggested to invest in mutual funds first.
Always remember following points while investing in mutual funds:
Understand the reasons for investment properly
Many times investors do not read the scheme papers properly. These papers have all the details regarding where the fund will be invested, in which asset class it will be invested and in which segment. So by reading these papers carefully, a person understands the reason and segments of investment.
Cross check the given information
Investors should check bank details given in Mutual Fund Account Statement properly. Always give the name of bank, account number and other details accurately. Little wrong information can cause great damage. In case even a single digit is wrongly written, the funds are not deposited in one’s account. All these things happen while updating the old bank details and inactivation or closing of the account that was registered while investment. Hence it is necessary to cross check all your details.
Avoid choosing wrong funds
Without understanding one’s need and without doing any kind of research many investors invest in funds. It is necessary for all the investors to know the reason, expected returns and risk that he can afford. An investor should then decide the investment time. One should also decide that whether the investment will be done all at one time or at regular intervals. Also, pay attention which fund is capable of full filling all your needs. One should also check the past and present performance of the fund, expense ratio and other important criteria of the fund.
Do not compare returns
People often compares, returns received on SIP and lump sum investment. It is not right to compare these two as return available after the long duration is almost same. It was found in a survey that in diversified funds there was hardly 2 percent of the difference in 10-15 years of time span whereas the difference was much more in 1-5 year time span.
Funds can be sold and bought by oneself
Investors can take care of their own investments through Direct Investment. If you have found certain funds after research then you can invest in opting buy and sell option. You can take help of guidelines given by the fund companies too. You can also compare different funds and buy them according to your need. The investor can sell the funds he has bought. Money gets a transfer in your bank account after the fund is redeemed.
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