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Mutual Funds Investment

Tips on How to Get Started with Mutual Funds Investment

“Mutual Funds are subject to market risk, read the offer related documents carefully before investing” – this statement read in one breath  has made modern day investors – who have little time to analyze the market –  invest in what could be the  quickest revenue generating mode of investment.

Knowing the potential that Mutual Fund Investments have, this article is meant to get investors acquainted with the fact that Mutual Funds are no different than any other form of investments which call for sound planning and strategic decision making.

In this article, we will be looking into the different factors any newbie mutual funds investor should consider when entering the Mutual Funds market for the first time.

Points to Consider While Making Mutual Fund Investment for the First Time

  1. Performance of the Mutual Fund

It is of prime importance  that the past performance of the mutual fund (one that goes back to at least 5 years) is well studied and analyzed.

For the purpose of research, while you can refer to a number of available sources present on the internet, you can also inquire about the mutual fund investment through initiating a contact with an AMC.

While researching, what you should focus on is comparing equity funds with each other by looking at the past three to five years’  performance. As the educated investor, you should consider looking at the funds that have shown a stable performance. Note that consistency is the prime word when you are looking to make stable, long-term investments.

  1. The reputation of your Asset Management Company and the Fund Manager

While it is the job of an Asset Management Company to offer multiple kinds of Mutual Funds as part of their company portfolio, it is your job, as an informed investor, to do your homework in finding out the reliability and stability of the funds which are administered by the AMC you are planning to get associated with.

You should make an effort to understand the different products that are being offered by your fund house along with their diversification.

Now when it comes to investing in mutual funds through an AMC, it is very important for you to cross-check the amount of investment and the suggested returns, especially when the AMC is newly launched.

Now, along with doing an in-depth research on the reputation of the Asset Management Company that you are planning to partner with, it is always equally important to look into the experience and background of the Fund Manager who would be allocating your money to different fund types for they are the people who would be making the decision of where to make fund investment on your behalf.

Therefore, it is of prime importance that you study not just their past performance but also the decision that they took in terms of navigating investors’ money when the market was volatile on a specific fund.

  1. Load Charges that you will have to Incur

Usually, the Fund House cuts some percent of the invested money that they collect from you – a term commonly known as Load Charges. While very nominal in nature, these cutbacks might turn out to be very substantial when you are looking at the long-term form of investment.

Even in loads, there are different types of load charges like the entry and exit load that have the tendency to consume a good portion of your earnings. And solely because of this reason, it is very important to keep a note of the load charges while making mutual funds investment.

[Extra: In case you are wondering where to find the load charges, head on to your scheme information document)

  1. Know the Power of SIPs

The last but probably the most important factor of the lot which you should consider for a strategically sound mutual fund investment experience is keeping an open mind about SIP (Systematic Investment Plan) investment.

SIPs are indeed one of the most secure and easy on the pockets forms of mutual fund investment that a newbie investor can put their money into.

Well, now that you have enough material to get started with Mutual Fund investments, it is time to get started with one of the quickest revenue generating mode of investments. Check the best SIP plans online and start investing, today!

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