Essentially, they are equity-funds which invest their entire portfolio in stocks of a particular sector. For instance, pharma funds invest only in stocks of the pharmaceutical industry. While they may have a diversified equity portfolio, they are riskier than a plain-vanilla equity fund that diversifies investments across sectors.

Saving need not be a boring activity where you grudgingly knock off your expenses and live sparingly to achieve your savings goal. It can be fun if your family joins hands. Using creativity can make it much more interesting.

Afraid to pick a debt fund? Track these features as a safeguardIdeally, one does not expect to lose money in any debt fund, however they too come with risks. If you want to ensure that yours is a high-quality fund with low risks, then here are three things that you should keep track of.

The most common metaphor for diversification is not having all your eggs in one basket. The portfolio theory definition of it is slightly different.

For goals that are going to take less than five years, fixed income makes most sense. These can include debt mutual funds, fixed deposits, Government and private bonds, NCDs, various post office schemes, and a few others.

Once you know your financial goals, and the asset classes you need for them, the next step in achieving these goals is selecting the right instrument. This approach will help you set rational return expectations, and more importantly won’t lead to disappointment.

However, along with the qualitative issues, you should filter performance against some standard to understand whether your fund is a consistent under-performer or if the downturn is temporary.

First let’s establish that we invest our money in the hope of a return. Risk, is the chance that instead of a positive return on your investment, you end up losing money or get a return lower than anticipated. There is no real risk-free investment.

A disciplined approach to investing can overcome emotions. Spell out your long-term financial goals and make a concrete investment plan to achieve it.

Visualization technique is a technique for performance improvement. Sports legends like Michael Jordan and Tiger Woods have used visualization to push their performance limits. This technique can be used in all walks of life including, achieving financial goals.

It is essential that women make their financial success a priority and they need to plan accordingly.

Increasing the SIP amount each year by even 5% can have a dramatic effect on your final goal amount. A 10% increase means achieving 7 lakhs more (or the price of a hatchback). When the increase is 15% the result is a corpus that’s three times bigger.