Points to be Kept in the Mind While Investing in Mutual Funds

There are umpteen numbers of mutual schemes available in the market. The task of picking the right one is not a cake walk activity. Many investors are of the opinion that any mutual fund they pick delivers desired results but it is not so as each mutual fund scheme is unique and caters to certain risk profile and picking the winning mutual funds is a tough task as one has to take into account both quantitative and qualitative aspects.

It is therefore imperative to take advice and guidance of experienced Mutual Fund Agent while making the final decision. One has to keep in the mind few points that enable to make correct decision:

1. Investment objective and risk tolerance: One your way of selecting Best Performing Mutual Fund, assess your investment objective and risk tolerance. If your goal is to earn capital gains for more than a year, then go for long term mutual fund scheme where your money gets siphoned for a period of at least 1 year in case of equity and at least 36 months in case of debt mutual funds. But if your investment motto is to earn current income, you should go for short term schemes.

2. Performance consistency of mutual fund: Next important thing to be checked before investing in Mutual Funds India is the performance of the scheme over the long term basis. Check the performance of the scheme for the past 3 to 5 years instead of checking the returns the scheme has generated.

3. Compare mutual funds with others: Just by understanding the mutual fund scheme’s own performance is not enough. It is vital to check how it has performed among its peers. This gives a comprehensive understanding of the whole scheme. Keep in the mind that comparison should be made only among the same type of mutual fund say for e.g. large-cap mutual fund schemes should not be compared with multi-cap fund schemes. Check the quality ranking of the scheme that showcases the performance on quarter to quarter basis among its peer group.

4. Mutual fund’s expenses: All the expenses that go into managing mutual fund scheme should be borne by the scheme and so it is vital to check what proportion of returns earned by the scheme is taken away by its expenses. Check the expense ratio and lower ratio, better is the scheme.

5. Experience of the fund manager: Experience is the best teacher. This is a vital factor to consider before investing in a mutual fund scheme. See how long the fund manager has been in this work and check how he/she has managed the fund during the fund’s worst and best periods.

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Tips to select Good Mutual Fund Advisor

Mutual fund is the latest buzz in the investment arena and investing in mutual funds is always an easy option. It is safe and secure medium to invest your money. However before investing in mutual funds one has to be very careful and have to analyze various aspects about the company and market.

One has to make sure that Best Performing Mutual Fund is selected and for this it is advisable to take the guidance and help from an experienced person who deals with this aspect and who is well aware of the changing scenario and market conditions.

Few pointers that one has to take into account before selecting good Mutual Fund Advisor are:

1. Experience: Your fund manager should be experienced and should have good knowledge of various market cycles. Always prefer for the advisor who had at least one downturn in the market. Indian financial market when through last downturn about 10 years ago, so look for  advisors who have been around for at least last 10 years.

2. Portfolio: One of the vital roles of good Mutual Fund Agent is to help the investor understand underlying the classes of assets in the mutual fund schemes and help them combine for reaching investment objectives. Always hire those advisors who have holistic view on portfolio, who do risk profiling process and understand your financial goals along with your objectives of investments.

3. Avoid being hurry: When it comes to investing, it is good to take time and clear all the doubts. A good mutual fund advisor will not motivate the client to make quick decisions as he very well knows that the mood of the market might undergo a change.

4. Ask for references: Request the mutual fund advisor for references and give details of all the investors with whom they have worked with, approach such persons and check their own experiences on the service and advice offered to them.

5. See clarity and compensation: Understand in detail the compensation model of the chosen advisor. With the introduction of direct plans, mutual fund advisors have adopted various models ranging from commission only, service on the basis of fee or fee only or combination of fee and commission. Each advisor picks the compensation model in sync to his business needs and the clients. Before hiring one, do check this aspect for clear understanding so that future doubts and confusion are avoided.

All in all a good investment advisor should be able to connect the needs and expectations of the investors to the features of various investment schemes and suggest the portfolio accordingly.

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Tips to Choose Best Mutual Funds

Planning to make investments in mutual funds, then it is advisable that one take into account some specific parameters for getting good returns on investment. Mutual fund is no doubt most effective source that creates long term wealth and so one has to take proper care before putting your funds in mutual fund schemes.

The main difficulty is in selecting right investment plan. It is vital to undertake in depth market research and analyze different parameters before investing in Mutual Fund Companies.

Below are different facets that one must adhere to while making mutual fund investment:

1. Understand your goals: Different investor have different goals as regard to investments. Like some may have long term while other might have short terms goals. So in the beginning every investor must understand the need of investment. Professional Mutual Fund Agent will help and guide in setting the target and help in opting the most suitable investment strategy. The agent will help you to set the target and guide you in selecting the most suitable investment strategy. Also when the goal and risk appetite is known, one can take flawless decision at the right time that will lead to greater benefits and higher returns.

2. Evaluate different fund houses: Once you are finished with setting up your investment goal, nest step is to analyze various asset management companies that provide Best Performing Mutual Fund programs. Go for the programs that are designed in sync of market analysis for catering the needs and requirements of the investors. Get proper insight of these asset management companies before handling money to them.

3. Look at the performance of the funds: Every investor makes investment with the desire to reap returns. So one must understand whether the schemes will yield profits or not. Even though past performance is not yard stick for future returns of a scheme, it certainly gives fair idea about the capacity of company in offering good profits. Analyze the track record, in case you feel confident then go ahead with your investments.

4. Consider loads and other expenses: Check all the relevant parameters which may affect especially cost as one of the major concern. There are different loads that are connected with investments in mutual funds, which have to be considered before making investments. Evaluate the same and see to it whether they are affordable and worth making or not. 

5. Evaluate diversification of the fund: It is always advisable to put the money into varied schemes to reduce the risk exposure. One must ensure that the money invested is fully diversified to generate maximum returns with minimum risks. One can invest the capital programs that have wide diversifications for yielding good profits for financially secure future.

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