achieving goals through mutual funds

Planning to invest in mutual funds?

A mutual fund is one of the preferred products to invest in the equity market for the possibility to earn substantial returns. But mere investing in mutual funds does not really guarantee higher returns and the creation of wealth.

As an investor, you need to keep in mind a few things that significantly affect the outcome of your investments in mutual funds. These are in no way less important than understanding the factors affecting the equity market from time to time.

But investors had been ignoring these basic and important factors that are in his control and focusing more on market trends and market news. 

That is why it has been observed that both globally and in India, investor returns in their equity portfolio are less than the returns generated by the equity market. That means though the market (Nifty / Sensex say) might have generated a good return in a period the investor could not generate the same return.

Have the right mindset, understand the instrument.

You as an investor are at risk of not gaining from your mutual fund investments either out of greed or out of fear both of which come due to a lack of understanding of the instrument. 

Ups and downs are a part and parcel of equity markets, understand the nature of the product, do not panic, and invest responsibly.

Invest responsibly, start with a goal.

When it comes to investing in a mutual fund, it is of utmost importance to start your investments keeping in mind a goal. As investments in equity mutual funds have easy exit policies there are high chances that you might withdraw or stop your investment at the first opportunity or need.

That is why it is not surprising that the average life of a SIP started is around 2-3 years although the investor starts the investment by seeing a projection of 15 to 20 years. If there is a goal for an investment the investor continues with it till it is achieved. When it is about investing in an equity mutual fund, always think long-term.

Think long term, stay invested.

There exist a number of investment products for you as an investor with different characteristics and suitable for different purposes. Equity mutual fund by nature is an instrument for long-term investment. Long-term here means more than 10 years. 

To reduce the market risk as well as to gain the true benefit of compounding from your investments in equity mutual funds, you as an investor need to stay invested for a longer term and stop making hasty decisions by following market trends.

Stop following market trends, get in touch with an advisor.

Stop following the news channels and media when it is about investing in equity, it will lead you nowhere. Also, I hope you understand, and it is not hard to believe that the celebrities who appear on TV and other media and offer investment and insurance ideas to the mass do not invest their own money without the advice of an advisor.

Get in touch with a responsible advisor or distributor of mutual funds who can understand your specific expectations from an investment and guide you through the journey and prepare you for uncertainties.

To know more and invest in Mutual Funds, connect with us

Disclaimer: Mutual Fund investments are subject to market risks. Read all scheme related documents before investing.

Read: How to choose a Debt fund suitable to your needs

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