22 Tips To Start Building A WHAT ARE,Shortlisting and zeroing in on the right funds represents the most important part of investing in Mutual Funds. Once you are done with the asset allocation that best reflects your needs, the next step is to look for and compare different Mutual Funds on the basis of their past performance and investment philosophy. For this, you should refer to the shareholder reports and prospectuses provided by AMCs. The prospectus will detail the information related to the Mutual Fund from a legal perspective while the shareholder report can help you understand the past performance and consistency of returns.
22 Tips To Start Building A WHAT ARE MUTUAL FUNDS INVEST? ,Look for the best funds in the asset class (equity, debt or hybrid). Ensure that they will help you meet your financial goals in the time frame that your need. They should also be according to your risk profile.Check the performance of the fund for different time frames such as 3 months, 6 months, 1 year and so on. While you could check for last 3 years performance in case of debt funds, you can go up to 6 years for equity funds.The funds that you shortlist using these criteria will be consistent performers and are most likely managed by exceptional fund managers.Check for the profile of the fund managers and the AMC management. This can be found in the prospectus of the respective Mutual Funds.
22 Tips To Start Building A WHAT ARE MUTUAL FUNDS INVEST?
,So, you have selected the funds you will invest in and have asked for forms and documents to fill in and submit. Your job’s done, right? No, following up on your investments is equally important. Any savvy investor will tell you the importance of keeping track of the funds you’ve invested in, even if the funds are managed by top notch advisors and managers. And if you have invested in open-ended funds, you can exit funds that have remained consistent underperformers.
Before investing in a fund, you should first be certain about what your ultimate financial goals are. Are you investing to substitute your current income or planning for retirement or are you looking to save for child’s marriage?
Why Mutual Funds?
When you can invest in stocks or government securities on your own, you may feel that you don’t need professional help to manage such investments. You could be wrong. Investing in the markets is not simply choosing stocks and forgetting about them. The process becomes fairly complex when more than a couple of stocks and fixed-income securities are involved and almost impossible for any run-of-the-mill investor. With professionally managed Mutual Funds, you can be assured that your investments are managed by people with many years of experience with market analysis. They will have enough knowledge to take calls on buying and selling those stocks and other investments.