5 Important Questions Answered For a First Time Mutual Funds Investor
Here are a few quick FAQs for the first time mutual funds investor.
How much should I invest?
clarify your goals first; this will help you decide the amount you need to invest to unprotected to each goal.
Should I invest in equity or debt schemes?
It chiefly depends on your investment objective, investment horizon and risk profile. If you are investing to unprotected to a short-term goal that needs to be achieved in a associate of years, debt schemes are ideal for you as these schemes are mostly risk proof.
However, if you have a long-term financial goal that needs to be met after five years or so, you can invest in equity mutual fund schemes as these have the possible to offer superior returns than other asset classes.
What is the minimum amount required to start investing in mutual funds?
It’s important to start investing and the beauty of mutual funds is that you can start with as low as Rs 100 per month. The mantra is to “start and stay invested for long term”.
If I start with Rs 100 per month, can I keep adding as my income increases?
Yes, you can. In a mutual fund scheme, you can make additional purchases in the same fund.
Is methodic Investment Plan the only way or I can invest in lumpsum too?
It depends on the amount of money you have to invest. A lumpsum investment gives more time to investment and results in higher returns as the strength of compounding (basically earning interest on interest) increases with time.
however, an SIP (the pre-determined amount invested at a regular interval) gives you the assistance of Rupee Cost Averaging (RCA), which basically balances out the volatility of the market in the long term. Since a fixed amount is invested at regular intervals, you get to buy more units when the prices are lower and vice versa.
Important piece of advice!/
Since you are new to investing in mutual funds, you must invest with the help of a mutual fund advisor for smooth onboarding, expert opinion and careful scheme selection.
Nivesh.com is a paperless experience for the investors. The platform simplifies the time of action by categorizing funds as per general investment objectives, and further curating schemes to provide a shortlist. The aim is to take away the complexity while ensuring objective investment course of action. After initial account creation, investors can transact in mutual funds in few simple steps. Post transaction, the platform helps in tracking the portfolio performance with timely alerts and notifications.