5 Strategies for Mutual Fund Investment

Mutual funds have become one of the most popular options for investment, and especially for first time investors, a vast majority of whom are salaried professionals. Mutual funds if done right can yield the kind of returns you are looking for, which are much higher than conventional methods of investment like stocks, real estate and fixed deposits. Mutual funds require careful planning and there is an array of companies in the market which offer equities and one is bound to get lost amongst the sea of options. If you are a working professional in the maximum city chances are that you might have already been approached by investment planners and consultants who professionally manage your corpus for a commission. Today in this article we will discuss about 5 strategies for Mutual funds investment which will prove beneficial for you.

1. Don’t look at the yearly track record: While selecting Mutual funds, every investor looks at their performance for the year and form an opinion about it. There are a number of factors which could have caused a particular fund to have a bad year. When evaluating funds consider all the factors including any volatility due to international incidents. If you have any confusion, get help of a professional fund manager.
2. Spread your funds: When it comes to mutual funds, minimizing your exposure to risk is of essence, and an effective way to do that is to spread out your investments. You should definitely avoid putting all your eggs in one basket. Shortlist the funds that you are interested in and dedicate a fraction of your corpus to each. Spreading does not mean that they should be equal in terms of value and you can invest more in funds that you think are likely to do better.
3. Fund managers: Fund managers can definitely help you in getting the returns you are looking for through their expertise and experience. A competent fund manager will not only set up your initial portfolio but will also manage it for you, according to the current trends in the market.
4. Don’t be risk averse: The fact of the matter is that no mutual fund is completely risk proof and you should be prepared to undertake a certain level of risk while investing. Dont adopt a complete risk free approach, as you will soon find yourself running out of options.
5. Start as soon as possible: Mutual funds take time to mature and the earlier you start the better. The mutual funds of today, can be bought with very little initial corpus and if you are a salaried professional, you can start with as little as 500 rs a month!

We have told you briefly about the top 5 strategies that you can use while investing in equity based mutual funds. We at SNPFP have over our course of history, tailor made hundreds of portfolios for our satisfied customers, and we would love to hear from you in case you have any further questions or doubts. Happy investing!