How A Successful MF Investor Thinks
Mutual Funds: A Smart Way To Invest
MFs are a great way to invest. Your money is pooled with other investors and overseen by a fund manager who does thorough research to ensure the best results.
What Sets A Good Mutual Fund Investor Apart?
But if you are new to investing, you may be unaware of what to look for. Here’s what successful MF investors do right.
Know Your Goals
There are different funds, short and long-term, that have the potential to fulfil all kinds of financial goals. A good investor matches the fund to his/her goals & invests accordingly.
Diversify
Successful mutual fund investors know that it pays to diversify and invest in a variety of asset classes, to avoid risk arising from a single asset.
Past Returns
Past returns are important, but don’t invest only based on this. Rather than short term high return, always consider long term consistent returns - the hallmark of a good mutual fund.
Ignore Short-Term Fluctuations
No fund will only be on an uptrend. Equity funds are for the long-term, so good investors will stick it out instead of panic selling when the market trends lower.
There’s No Perfect Time
You can never really hit the bull’s eye and time the market for the perfect investment. Seasoned investors will keep investing regularly to average out both the risk and cost.
Returns Vs Expense Ratio
All AMCs charge an expense ratio or fee for fund management. You should consider it - but good investors won’t give up on a reliable fund just because of the expense ratio.
Invest Today
Now that you know what to consider - why not start investing in mutual funds today? Even a small amount each month can grow considerably over a 5-year period!
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.