Mutual funds are widely considered as safe bet to invest your hard-earned money for future use. The saved corpus serves as a last resort for people who retire at an early age and those who don’t have any other source of income to fulfill their monetary needs.
Merely investing money randomly for the sake of saving for retirement has never been a good idea. Choosing the right mutual fund company will spare you from unwanted troubles.
Here are top 5 things to keep in mind before you make your first investment through mutual funds
- know what type of mutual fund you want to invest in. The investor needs to identify the right assets allocation method. Always do your homework before you invest.
- The popular thumb rule for asset allocation is that the debt allocation should be same as your age.I.e., if you are 25 then your debt allocation should 25 percentage of total investment allocation.
- Know what your financial needs are. Like are you saving for your childs educational needs? To buy a car? Or to buy a house?
- The longer your investment period is , then the risks are also longer.
- An investor must gear herself up for lows and ups in prices of mutual fund holdings. Mutual fund investments must be made as per an investor’s risk tolerating potential.
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