Strategies for investing in mutual funds India schemes
Mutual Fund schemes are an investment form in which investors with common financial objectives, invest their savings into various securities like, bond, debentures, equities, gold, money market instruments and Government securities, etc. It is a pool of money from various investors which is professionally managed, invested in diverse places and can be invested in with a small amount.
Mutual Funds India offer good investment options for the common investing masses as they are accessible, affordable and offer a variety of options. Investors can choose from funds which is based on risk capacity, financial goals and investment time horizon.
Suppose, a person can take moderately high risk while investing, then, he/she should opt for equity mutual fund schemes, provided the investment time horizon is long. Similarly, if the time horizon for investment is, like a few days or moths, then the investor can go for debt funds that may include liquid, overnight or ultra-short term funds.
Explaining and understanding further, here are 5 strategies that one can follow to become a successful Mutual Fund India Investor –
Comparison – It is always important to compare various funds in different categories before making an absolute investment decision. This is important in order to understand the concept of mutual funds with depth and also to gauge the kind of investment one is going to make. One can compare the top performing funds of various categories during a particular period of time. Then, depending on ones’ risk taking appetite as well as long term financial goals, a decision to invest in them can be taken.
Understanding financial goals – People have various financial goals like buying a house, car, child’s education, medical expenses, etc. One can even invest in mutual funds online to realize these goals in mind.
Monitoring of investments- In order to become a successful mutual fund investor, one must monitor their investment portfolio at least annually. This is imperative because the performance of various funds changes over time due to fall or rise in markets, change of the fund manager, etc. One needs to understand that the job of investing is not over right after you invest in mutual funds. Continuous monitoring is required in order to make sure that the funds are performing as expected and if any changes to the portfolio needs to be made. This check can be done half-yearly or annually by comparing the performance of the funds with its respective benchmarks and peer groups.
Restructuring of Portfolio – Post the review of investments in mutual funds, it is clear if some changes are to be made in order to reach the financial goals on time. Thereafter, necessary measures need to be taken for reshuffling the existing investments like shifting to a better performing scheme while keeping in mind the asset allocation strategy and risk profile.
Consistency and discipline – The key to becoming a successful mutual fund investor is to remain consistent with your investments. Suppose, you opt for a monthly SIP of Rs 5,000, you need to ensure that you have sufficient balance in your bank account on the SIP date. Once you continue to do this, achieving financial goals becomes easy.
In the current times, it is easy to invest in funds as one can invest in mutual funds online, with a few clicks. Mutual funds India offer variety of funds, but you should choose the mutual fund schemes based on your risk appetite and time horizon.