Want To Make A Smart Mutual Fund Investment? Here Are the Tips
Mutual funds are not just popular but also profitable when chosen wisely. They are far less risky and convenient to invest in as opposed to direct stock investments.
If you think, mutual funds are the best investment option for you then why not go for them? For the best results, however, you must invest in them smartly. Below, you find a few amazing tips on how to make smart mutual fund investment. Just check out -
Fulfilling your short term mutual fund goals -
If you are looking for short term results then debt mutual funds are the option for you. And they are the perfect kind of investment for meeting emergencies. They can make cash available to you when you need it urgently, for instance when you probably need to make a down payment for something, say a car, or while paying your emergency medical bills.
Since debt mutual funds are for a short term, you must see to it that you are not falling victim to market volatility. If uncertainty in the markets consumes a good chunk of your money and your investment ends up losing “real numbers-value,” then your investments won’t do any good to you in times of emergency.
Debt funds such as short term funds and ultra short term funds, hence, are the perfect option for you if what you are aiming at is meeting emergency financial requirements.
Fulfilling your mid-term mutual fund goals -
If your financial goals are within a time range of 1 to 3 years, then you can opt for mid-term mutual fund investments. So, people aiming at launching their own business usually go for this option. A lot of people also consider them an amazing investment option when it comes to buying property.
Mid-term mutual funds expose investors to a mix of growth and risk. The trick is to maximize gain in capital keeping risks at a moderate level. After all, the investment period is not too long to be absolutely risk-free. For best results, you can either invest in balanced funds with the SIP approach or in debt funds. If you are a service person with a steady flow of salary, opting for SIP investments would be the best bet, especially if you don’t know the tricks of the equity trade.
Fulfilling your long-term mutual fund goals -
Mutual funds that allow you to invest for five years or longer are called long term funds. So, this option is best suited to investors looking to fulfill long term financial goals. These goals may include your child’s higher education, age related medical issues, or your post retirement life.
The best option for long term mutual fund investment is equity. If you think equities are risky, then it would be valuable for you to understand that the risk factor kicks in only when the investments are for a shorter term. Long term equity investments are not only less risky but also more profitable.
So, now that you know which mutual fund investment type is best suited to your financial goals, you will be able to make a well informed investment decision.
Mr. Ajay Kumar Jain, M.Sc, Chief Managing Director
Being the Chairman cum Chief Managing Director, he focuses on holistic investment planning and wealth management and tries to make investment planning simpler for retail and HNI investors. Investor education is one of the prime things that Mr. Ajay Jain focuses on as he believes financial education is the foundation of successful investing. With over two decades of experience, Mr. Jain has made a mark in the Indian mutual fund industry due to his compassion and sheer hard work.