Are you first time MF
investor?
I dedicate today’s
blog to my new mutual fund investors. India has less invested in mutual funds
if compare with other asset class like fix deposit, real estate, post office
saving etc. Although the mutual fund has been the great wealth creator in long
run and outperformed to all asset class but still it is not very famous among
investors.
Since last 2 years
the scenario has been changed, many new investors have started to invest in
mutual fund. The problem is many investor do not know the basic of mutual fund
schemes and often choose wrong schemes, so now it is more important to educate
the investors about mutual fund which is new to these investors. There are many
types of mutual funds are available in the market but what is your requirement
you should know first.
First of all if you
are planning to invest for 1-5 years, never go with pure equity plan. You
should go with debt mutual fund or balance plan depend on your time horizon and
risk appetite. In debt plan, there are many types of plan which are good for
different time horizon investor. So investment time plays vital role to decide
the mutual fund scheme.
After deciding the
investment time frame, you should also know the expected return, fund’s track
record, fund manager and where the fund investing your money. All the
information is also available with your adviser and online also. You should
know the real rate of return after adjusting taxes and inflation. After all,
your investment must beat the inflation at all.
Never go after scheme’s
NAV. It does not mean that the lower NAV scheme is better than high NAV scheme.
Old schemes often have higher NAV and new investor think it is very costly. It
is wrong assumption after all rate of return is important not the current NAV
figure. Always choose growth option if you are going for long term investment.
When you plan to
invest in mutual fund, please follow the old golden rule that never put all
eggs in one basket. It means never invest all money in one particular scheme.
You should diversify your portfolio and review it time to time.
If you have doubt about investment
product and want more information regarding investment or you need investment
services, feel free to ask us. We also conduct the seminar on investment and
financial planning. If you are interested for conducting seminar in your city,
just drop the mail.
Warm regards,
Arvind Trivedi
Certified Financial Planner
