mutual fund investment If the investor is ignorant of the fundamentals of equity investing, the plans for starters can be like a nightmare. According to tax and investment experts, equity mutual funds are subject to market risks and hence it is important for an investor to know their risk profile before investing in any mutual fund. Similarly, proper asset allocation, limited portfolio review frequency and discipline in investing are required. He asked mutual fund investors to remember that one thing that may be good for others may not be good for them and hence an investor needs to understand that there are certain things before investing in equity mutual funds. The rules have to be followed.
Speaking on the importance of risk profiling; Jitendra Solanki, SEBI Registered Tax and Investment Specialist said, “Risk profiling is the first and foremost step that an investor needs to follow before taking a decision related to mutual fund investments. or lower) as risk profiling includes various aspects like investment experience of the investor, investment goals and time frame, family dynamics etc. Solanki said that once an investor is aware of their risk appetite, there comes an important aspect of investing, which is called asset allocation.
Highlighting the importance of asset allocation in one’s portfolio; Pankaj Mathpal, MD & CEO, Optima Money Managers said, “Equity Mutual Funds have various categories like small-cap, mid-cap, large-cap, mix cap, etc. Once the investor has an idea about the risk appetite of one If detected, he or she should look at asset allocation diversifying mutual fund investments in small-cap, mid-cap, large-cap, etc.”
How to change your investment strategy during market correction
Jitendra Solanki said that small-cap mutual funds tend to be highly volatile in both bull and bear cases while large-cap funds see least volatility. Hence, one can increase or decrease his/her small-cap and large-cap exposure depending on the bull and bear market.
Solanki also said that when the market is reasonably correct, a mutual fund investor can increase his exposure to small-caps and reduce his exposure to large-cap funds and maximize profits if the market rebounds. can receive.
How to become a millionaire by investing in mutual funds
Pankaj Mathpal of Optima Money said that there is a 15 X 15 X 15 rule of mutual funds which states that equity mutual fund investments will yield returns of 15 per cent for 15 years or more. He said that if an investor invests 15,000 for 15 years, then the mutual fund calculator suggest that one’s maturity amount after 15 years will be approx. 1 crore. So, one can hope to become a millionaire investing 15,000 for 15 years in monthly SIP mode.
Mutual Fund Review Tip
Pankaj resonated with Mathpal’s thoughts; “Discipline in investing and limited investment review frequency are critical once risk profiling and asset allocation is in place,” said Jitendra Solanki, a SEBI registered expert.
Solanki said it has been found that people review their portfolios every day (sometimes more than once a day), which is undesirable. One should review his portfolio twice or thrice a year and keep investing in mutual fund schemes at regular intervals. Reviewing his portfolio, he advises investors to see whether the scheme has generated alpha returns or not. If it has generated alpha return, then the plan should continue without any hassle.
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