May 04, 2018 4 min read

Best Mantras of Successful Mutual Fund Investing

Read this blog to find the best fund as you would require to make a successful investment in mutual funds.
Now that we know that mutual funds are the best bet to create wealth in the long-term, its time to use this knowledge to our advantage. You might have invested in two or even more schemes for some time now. However, it’s still a possibility that the under performance of any of the scheme(s) might be hampering the peace of your mind.

To ensure that you reach your goal in the set tenure, use of tips or mantras provided by financial gurus will prove to be valuable. Let’s see what’s our take on this.

  1. Follow a Sensible Investment Strategy 
    The market is volatile, and predicting its next moves is right next to impossible. Thus, it’s crucial to follow the right and personalized investment pattern as suggested by your expert. Factors such as investment objective, risk appetite, tenure, etc., should be decided keeping your personal goals in mind and not on greed. With mutual fund investment, you have to learn to be neutral. Avoid panicking and exiting an investment just because the market is low, and similarly, over investing in a risky scheme, just in the hope of exceptional returns in a short time.
  2. If You Are New, Don’t Follow the DIY Approach 
    People who follow the DIY approach in the first attempt are majorly the ones who end-up making poor investment decisions. This situation simply boils down to the old saying, ‘a little knowledge is a dangerous thing.’ It often happens that the ones who have a certain understanding of financial matters assume that they know it all and get too adventurous with their money. This leads them to face more significant losses. The only solution to this issue is to stick to the advice of a financial expert and trust his/her instincts.
    Besides, it’s important to remember, ‘too many cooks spoil the broth.’ So, do not try to confirm single advice from different experts, as they might have different take on a particular situation.
  3. A Big No to Get-Quick-Rich Schemes 
    Remember, when you’re investing in mutual funds, you’re somewhere playing in an unpredictable environment. There would be many schemes whose returns might seem enticing, in all such cases think of the worst possible situation and then invest. With growing popularity of this market-linked investment option, there’s a rise in miss-selling of schemes too. To protect yourself from any fraud or losses, invest in the guidance of an expert who can provide you with unbiased suggestions.
  4. Do Not Try to Time the Market 
    Let’s first understand the concept of timing the market. It is an investment strategy where investors buy and sell stocks based on expected price fluctuations. However, such level of prudence is hard to find, and thus it is better to sail when the tides are low.
    Every one of us knows that one should buy when the price is low and sell when the price is high. However, nobody knows how to use this mantra in mutual fund investment. It is not possible to time your entry in the market as the market is unpredictable. But, it is possible to invest early (and regularly) and stay invested so that your money has enough time to grow through compounding. Also, avoid churning the portfolio unless necessary.
  5. Diversify 
    Every financial decision is made at a cost; sometimes a price that you can’t just afford to lose. Mutual Funds provide an advantage of diversification over others. This ensures that if you have invested in a particular scheme of large-cap, there would be some allocation to other segments too. This prevents the returns from dropping to a great extent.
    Investment should be balanced where some amount is invested in mid-caps and small-caps which fluctuate rapidly and some in large-caps and balanced funds which offer support in tough times. However, there is no fixed rule of diversification; you can do it as per the requirement.

Bottom Line

It’s quite easy to read investment tips, following them is a real challenge. To ensure that you don’t make any mistake in your initial mutual fund investment, get the best guidance and support from our experts. We provide free-of-cost guidance and best services regarding mutual fund investment.

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