There is no age restriction for
savings. You can start this at any age but expert financial planners will
suggest that earlier is better. Starting
early will help you enjoy the maximum benefits from all the drive engines that grow
your fund. At one hand, you’ll give the maximum time span to your investment to
take the benefit of compounding. On the other hand you have the chance to
review and revise your portfolio, yet giving your corpus enough time to grow.
Nevertheless, there is nothing actually to stop you from reviewing and learning
new investment avenues. If you have not included mutual funds in your
investment plan for the shortcomings in knowledge, here we give you 5 essential
tips to help:
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Get Started
First of all, you decide your
investment short-term and long-term goals.
It may range from your retirement planning, your child’s education or
marriage to things you would like to accomplish in next 2-5 years. You will
have to decide on your fund allocation for achieving each of the investment objectives
before you get on to the next step.
Choose the Best Funds
Here you select the fund to meet
your purposes. You have to choose from a broad range of mutual funds. The best
is to start with balanced funds.
Know Your Risk Appetite
There are funds which give more
exposure to equity than on debt. These can give you higher returns but the
associated risk is higher. On the other hand, there are funds which channelize
your investment more into debt than in equity avenues. These are safer but the
returns are low. To select a fund you should do some research on its
performance and background. You should also check important aspects of the
mutual fund like entry and exit fees, expenses and fund manager’s credentials. Select
funds for your portfolio based on your risk appetite.
Build Your Portfolio
Here you put in all your strategies
and tools to gain the maximum result. The thumb rule for building the portfolio
is to diversify the investment. You should maintain a balance in putting your
money in equity and debt through mutual fund instruments.
Analyze the Performance
It might sometime be fooling if
you go by the past reputation of a mutual
fund. Look more closely at the performance of the fund in last 5 years and
take advice from professional financial advisors before you decide on investing
in mutual funds.
