Are you a “new” investor? Umm. Let us be more specific. Are you a “new” mutual fund investor? In that case, you might be facing a tough phase while making investments in 2019. Many investors whom we have made a connection with have just started investing in mutual funds after the “demonetization” drive was carried out by the central government. This what has created the major problem among the investors.
Like you, there are many investors who have staggered while getting negative returns from their equity mutual fund investments. For those investors, it is extremely decisive to stay focused on their investments during uncertain situations.
Still having confusion about how to handle all your investments? Look no further. Here in this blog we have listed down 5 crucial rules that if you embrace them in 2019, you can surely enjoy in the end, making successful mutual fund investments.
1. Stop chasing Returns: When you stop chasing returns, the return will chase you. While making your mutual fund investments, it is certain that you will be told about high returns. But if you believe that high returns will knock your door from the day one then you are surely on the wrong track.
Additionally, there are some investors who prefer to invest their money in schemes depending on their past performance and expect similar returns in the future as well. This is completely the wrong approach.
Instead of choosing the schemes based on past performance and expecting high returns from the very first day, you need to look for risks associated with it. Higher the risks, higher will be the returns. Hence knowing your risk appetite will help you to make perfect investments.
2. Focus on your Investment Goal: Every investor has their own specific investment goal. Some want to make an investment for their child's higher education, some make investments for their daughter's marriage, and so on. The list is long but the main motive is to make investments and save money. Therefore, you must go for those schemes that cater to all your needs.
For instance, if your goal is for long-term, you should make investments in equity mutual funds, whereas for short-term goals, debt funds are the best. Generally, there are investors who invest in mutual funds online just for high returns. But they lose their focus when they encounter adverse situations. Are you doing the same? This is what you need to rectify while you are planning for investments in mutual funds.
3. Be patience during Uncertainties: Another most important thing that new investors least emphasize on is patience. Patience matters a lot whenever you are investing in mutual funds. Especially when there is any uncertainty or volatile period, instead of panicking, you need to stay calm and keep trust on your investments.
We have seen many investors, making investments with strong zeal but during the volatile period they withdraw their money. Mutual fund investments is not a game of a year. It has to be played for a long-term period, if not long at least for 5years.
4. Have Balanced Portfolios: Having a balanced portfolios is yet another technique that you must learn while making investments. Based on the market survey it has been found that many investors who have joined mutual funds after the hike of the equity market in 2016, started investing just in equity mutual funds.
Being an investor, you need to keep in mind that one asset class for example equity mutual funds can never perform all the time. There might be ups and downs in the market. Hence it is feasible to depend on a plethora of portfolios, instead of a single one.
Investing in mutual funds is one of the finest ways to secure your future and achieve your financial goals. But not every mutual fund tailors your needs. Hence, it is beneficial to look for the fund that cater to all your requirements.
The best way to get the best advice regarding your investment is to look for a financial advisor. Some financial studios like Wealthclock Advisors will help you with your concern.
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