{"id":5083,"date":"2019-02-13T09:00:39","date_gmt":"2019-02-13T03:30:39","guid":{"rendered":"http:\/\/capitalante.com\/?p=5083"},"modified":"2019-03-17T17:36:17","modified_gmt":"2019-03-17T12:06:17","slug":"common-mistakes-to-avoid-while-investing-in-mutual-funds","status":"publish","type":"post","link":"https:\/\/capitalante.com\/common-mistakes-to-avoid-while-investing-in-mutual-funds\/","title":{"rendered":"Top 10 Common Mistakes to Avoid While Investing in Mutual Funds"},"content":{"rendered":"
<\/p>\r\n
The mutual fund is a safe and good option for investment if you don\u2019t have any idea about direct equity. An individual can invest in the mutual fund in two ways. He\/she can put a lump sum at once or the individual can invest in a monthly basis with a small amount of Rs. 500\/- only. This kind of monthly investment is called systematic investment plan or SIP. Now, you should be careful about conditions or risk associated with a systematic investment plan. Here we are going to explain the common mistakes to avoid while investing in mutual funds that investors, particularly the novice investors make when they invest in mutual funds via SIPs.<\/span><\/p>\r\n \r\n\r\n<\/span><\/p>\r\n \r\n\r\n<\/span><\/p>\r\n \r\n\r\n<\/span><\/p>\r\n First, you need to analyse your financial goal and then invest accordingly. You need to specify your goals either it is short term or long term because you have to set your investment portfolio in accordance with your goals. Let’s make it clear with an example. If you are of 25 years and planning for retirement at 60 then you have 35 years. In this case, you should invest in the equity asset class, because the equity asset class outperforms all the asset class over the long term. Since retirement planning is a long term goal, you need not worry about market volatility in the near term.<\/span><\/p>\r\n \r\n\r\n<\/span><\/p>\r\n \r\n\r\n<\/span><\/p>\r\n But if you are planning for the purchase of a four-wheeler within the next few years then you need to invest your corpus in debt instruments, because in the short run stock market is quite volatile. Suppose, after you make the investment the market goes into sharp correction or remains volatile in the upcoming one year. So, you may suffer a huge loss. In order to avoid loss in the stock market, you need to analyse your financial goal and then invest accordingly which will help you to achieve your targets in life.<\/span><\/p>\r\n \r\n\r\n<\/span><\/p>\r\n \r\n\r\n<\/span><\/p>\r\n \r\n\r\n<\/span><\/p>\r\n Many novice investors start investment without understanding the asset allocation, risk profile. They start investment in mutual funds because mutual funds have given better returns in last one year. But these investors do not check Fund type, Asset size, Exit load, Expense Ratio, and Fund Rating, etc. You need to analyse your time horizon, the performance of the fund during the past 10 years, portfolio allocation etc. before investing there.<\/span><\/p>\r\n \r\n\r\n<\/span><\/p>\r\nTop 10 Common Mistakes to Avoid While Investing in Mutual Fund<\/strong><\/span><\/h6>\r\n
Does not have any financial goal<\/strong><\/span><\/h6>\r\n
\r\n
\r\n
No Research<\/strong><\/span><\/h6>\r\n