Consider these 9 things before investing in mutual funds!
What is the right way to invest in mutual funds? How do mutual funds work? What kind of risk is involved? Which fund is right for whom? What things should be kept in mind before investing? Watch this video to know-
Regular investment is a good habit and one should begin it from an early age. Regular investment of as low as Rs 500 or Rs 1,000 would make you a ‘lakhapati’ after a certain time. Experts always advise that should start investing from early days. But before investing one should keep some important things in mind. Money9 gives you a brief checklist.
Asset allocation
Asset allocation is one of the most important things before the investor. How one allocates his/her asset it purely depends upon multiple factors. In other words, it means how much of your investible corpus would you put in different asset classes such as equity, debt and gold.
Set goals
Whatever your age is, it is essential to begin your investment journey by defining your goals clearly, for the short, medium and long term.
Risk calculation
Risk factors are intrinsic to any investment. Measure your risk tolerance level meticulously and decide where to put your money. Don’t fall into the trap of fraudsters, promising high returns.
Diversify the asset
Make sure your portfolio is not dependent on any single industry or single section, i.e. equity, debt or gold. The idea is to stay on track with different portfolio and meet the goals.
Wait for your turn
Every investor goes through both good and bad times. So, wait for your good time. Be patient. Especially for the young investors, it is crucial to stick to your strategy and patiently fix your gaze on a long horizon.
Invest today
There is no right time to start investment. Every day is the right time to begin. Experts always advise that the sooner you start investing the more corpus you can create. So, don’t wait, start investing from today.
Retirement planning
For a young investor, retirement is often an ignored goal. But one should plan it from the very first day of your investment, and then only you will make a big and healthy corpus at the age of 60.
Expert opinion
First-time investors should keep in mind that the purpose of investing across different asset classes should be based on their financial objectives, time horizon and risk appetite.
“As a beginner, it would be a good strategy to gradually increase allocation into equities. It is fine to have a higher allocation in debt instruments at the initial stage. But obviously one should consult a professional,” said Nilotpal Banerjee, an investment planner based in Kolkata.