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How to Start Investing In Mutual Funds

Off late, people have started veering towards mutual funds. While many are thorough with their understanding of the product, a lot of them do not know how to utilise the instrument to their advantage. Hence, we have built a step-by-step guide on how mutual funds can enhance your financial prospects.

Start By Defining Your Goals

  • Make a list of your goals based on your priority; this will help you identify how you need to spread cialis generique out your mutual fund investments and the amount you require for each goal.
  • If you have short-term goals, you can focus more on debt schemes; with minimal exposure to equity schemes. When the time frame is small, it is wise not to expose your investments to unnecessary risk, you don’t have time in hand if something goes wrong.
  • However, if you are playing with a longer time frame, you can choose to bet on equity mutual fund schemes to achieve them. Simply put, you should choose a scheme that is in line with your goal, investment horizon and risk profile.

Compare fund types

Once you have identified your financial goals, you should start short listing funds based on them. Below are a few tips to pick up the right funds:

  • Understand the past history of the fund and how has it performed during market fluctuations.
  • Ensure that your funds fit as per your time frame and risk profile.
  • In case of debt funds – check the performance for the last 3 years and in case of equity, check for the last 6 years.
  • Check the performance of the fund manager

If you follow the above process, it will help you make an informed decision and choose the right Mutual Fund for you.

Get in touch with a Financial Advisor

If you are not seasoned with the markets, then it is smarter to hire a financial advisor who will help you get around the nitty gritties of investing. You also have the option of investing through broking websites such as Edelweiss(link), which offer robo-advisory. Having the aid of a financial advisor will help you build wealth in the long run.

  • Benefits of a financial advisor
  • Personalized recommendation of schemes
  • Clarification of queries, if any
  • Keeping a track of investments and timely sell recommendations.

Vikas Agarwal
the authorVikas Agarwal
Vikas Agarwal is an IIT-Varanasi graduate in Chemical Engineering. He is the Founder and CEO of Finaacle.com - an investment advisory website. He is a Business Development Professional but a Value Investor at heart. He writes articles on Finaacle, which focus on simplifying the art of investing and the causes of human misjudgment when it comes to investing. He also shares his experiences as an investor and lessons from some of the greatest investors of all time.
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