Start Investing with Free Expert Advice!
Before investing in any mutual fund, it is essential to note a few key points.
Determining your financial goals and investment objectives is of primary importance. It helps you understand what you wish to achieve with your investment. As a result, it will help you know how much to invest and for how long, as your goals or objectives can be short- or long-term.
Your risk tolerance is the amount you are willing to take on investment risks. It's influenced by your income, lifestyle, and age. Some people have a high-risk tolerance, while others have a low-risk tolerance. Understanding your risk tolerance makes investing in mutual funds easier.
The time horizon implies the duration for which you are willing to invest your money. It can be as short as a few days or can stretch even for months or even years. Different mutual fund categories have different time horizons.
For instance, one to three years is ideal for debt funds, while for equity funds, more than five years is considered best.
To select the most appropriate mutual funds, consider the following factors:
When looking for mutual fund schemes for investment, consider which funds provide positive and consistent returns over time. Moreover, the funds should generate good returns even during bullish or bearish stock market periods.
A fund manager manages a mutual fund by investing the amount across various financial instruments. Hence, the experience and expertise of the fund manager are significant factors to consider.
An asset management company (AMC) is a company that manages mutual fund schemes. AMC's expertise is an important point to note because it directly affects the performance of your mutual fund.
Financial well-being requires careful asset allocation, which refers to the distribution of your investment across various mutual funds. Asset allocation can be influenced by risk tolerance and other factors. Given below are some preferred investment options:
Analysing the various mutual funds available to understand their performance against benchmarks is a must. For example, some funds have the NIFTY index as their benchmark.
Also, take into account the expense ratio, compare the performance of your preferred mutual funds against similar funds, and observe the exit load.
It can become a bit difficult to understand all this financial and technical jargon. If you feel stuck, it's advisable to seek assistance from investment experts or financial advisors. They can help you select the right funds based on your specific requirements and goals.
Motilal Oswal invests in mutual funds with its tools, platforms, and other educational resources. Even if you are a novice, educational resources can guide you as you begin your investment journey.
Also, Motilal Oswal offers a curated portfolio, keeping in mind the needs and requirements of various investors. All you need is a DEMAT account to start investing.
Take the first step in your investment journey with Motilal Oswal today!