Invest in Mutual Funds: Ever since the whole world came under the grip of the corona pandemic, people’s attitude towards their life has changed. Earlier people did not take so much seriousness about investing and securing their future. As much as it has started taking in these two years now. People have now started having more confidence in safe investments for their families in which the returns are high. As a result, the equity market share of retail investors has increased in the last two years.
There are many investors whose seriousness towards investing has also become much more than before. In such a situation, if you want to diversify your portfolio, and want to invest in mutual funds for 5 to 10 years, then know how you can invest money in mutual funds through SIP, and get better returns.
How to Invest in Mutual Funds?
New investors who are going to invest in Mutual Funds for the first time, it is very important for them to know that for what purpose they are investing and for how many years so that they can get a good return. Investing in mutual funds through SIP is better and safer than bank FDs. Through which you can start with an amount of Rs 100 to Rs 500. There are several ways to invest in mutual funds through SIP, through which you can build your mutual fund portfolio.
You can earn good profits by investing in Mutual Funds for a long period of time. There are two ways you can invest in mutual funds, one is SIP which is called Systematic Investment Plan and the other is Lump sum.
However, market risks also have an impact in mutual funds. But even then, for long-term investors, the benefit of compounding by investing in it is quite good. Before adding mutual funds to your portfolio, make sure that what is your goal and what you want to invest for.
For example, whether you want to invest for children’s education, marriage, building a house or for your retirement, then investing in that type of fund is considered a better option accordingly. You can also open your demat account or through an agent for investing in mutual funds. If you invest in direct funds with demat, then the commission is less or less. But, if you have invested in the fund through an agent, then it is called regular fund, in which you have to pay commission to your agent also which is deducted from the account or fund income itself. Because of this, the expense ratio increases.
It is advised that if you do not have complete knowledge of mutual funds, then it is always the right option to invest in regular funds.
What Expert says about Mutual Funds?
According to Adil Shetty, CEO, BankBazaar, “Investing in mutual funds is no longer as difficult as it used to be. However, this can be a bit confusing for the new investors. So the easiest way to start is to decide your investment goal and then invest. First try to know whether this investment is for one of the investment options in short term, medium term or long term.
If you are an investor, then you are advised to start small and stay invested for long term. This will help you in building up your large corpus. Also, it will protect against any kind of loss in the market. Therefore, it is important that you start with a small amount in SIP and invest in any blue chip company or large cap funds.
How to decide which fund to invest in Mutual funds? or wealth management companies invest their money in the stock market itself. And points are added to your mutual fund portfolio according to the market volatility. The market rally also has an impact on the funds. So always invest according to your requirement.
How much risk can you take, for how much time you can invest, if you are employed, do you have to invest in tax saving funds to save tax, or do you have to invest a lump sum amount for a certain goal at once. Keeping all these things in mind, it is right to invest. One can invest in Smallcap, Bluechip, Midcap, Multicap as well as Debt funds. Look at the asset size of the fund You can also take into account important factors like Standard Deviation, Sharpie Ratio, Beta.
Benefits of Systematic Investment Plan (SIP) in Mutual Funds:
There are many benefits to doing a Systematic Investment Plan. It is a better option for investors who want to reduce the risk taking place in the stock market. Anyone can get SIP done starting from Rs 100-500 every month. Also, there is the benefit of compounding and higher returns for the long term ones.
Every month you can invest a fixed amount through SIP. Its advantage would be that when the returns in the stock market increase, you can also increase your installment through top up. Also, if the market has fallen and you feel that you cannot deposit money in SIP in such a situation, then you also have the option to pause your SIP. If you have taken a regular plan, then you have to fill a form given by your agent through which you can pause SIP for a few months and if you have taken a direct SIP then you can go to the website of that SIP or Wealth Management Company. You can select the Pause option.
Where to Open Account for Invest into Mutual Funds?
In today’s date there are many such apps – there are many apps like CAMS, Paytm, Groww, Zerodha through which you can invest in SIP anytime and can also withdraw the money invested. Provided that it is invested in Wealth Creation Direct SIP. Keep in mind that, if there is an ELSS ie Equity Linked Saving Scheme, then you cannot withdraw money before three years.
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