Do you know how to invest in a mutual fund? Still searching for top 10 Mutual Fund companies to invest in? You might be having a lot of question at this stage. Investing in Mutual Funds is increasing day-by-day. We have an experience of over 30 years in the field of investing and have found out some great useful tips to invest in Mutual Fund.

An investment in knowledge pays the best interest. – Benjamin Franklin

Check out these 8 Tips to Invest in Mutual Fund:

1. Invest according to your Goals:

You must read the scheme related documents carefully to understand the objectives. These objectives must help in attaining your goals of investment. You must also take into note the historical performance and the time horizon. Ensure that you invest in a scheme that is likely to offer the best return, in time for your goals. The equity mutual funds can be used for attaining goals within 5 years of time limit.

2. Maintain Discipline:

If we see long term, small but regular investments have shown better returns. You can go for Systematic Investment Plan (SIP) and start investing monthly into Mutual Funds. This will help you by averaging the cost. You can even make additional purchases if you have more surplus to invest.

3. Diversify your Investments:

Mutual funds offer you several opportunities to diversify your investments. There are different types of funds like Diversified equity (large-cap, mid-cap, small-cap), sectoral funds, commodity-related funds, global fund of funds, index funds, etc. along with the gamut of debt-based funds. There are ample baskets for all your eggs. Choose wisely.

Emotional investment is a sure way to make loss in stock markets – Rakesh Jhunjhunwala

4. NAV is not the Decision Making Factor:

Among all the tips to invest in Mutual Fund, this is very crucial. NAV and Stock Prices are different altogether. The absolute value of a Mutual Fund NAV does not disclose anything about the quality or performance of the scheme. NAV clearly determines the function of total asset under management & the units that are outstanding. Therefore, a scheme with a NAV of Rs. 80 is not necessarily better over a scheme having a NAV of Rs. 50. Again, if you think of investing in a New Fund Offer (NFO), it does not mean that you are buying low. Please note that you must consult a financial advisor before investing in Mutual Funds.

5. Play Longer in the Market:

We all know the buying low and selling high concept. However, nobody knows what these levels are. You cannot time your entry in the market. Therefore it is better to invest early and stay invested so that your money has enough time to grow on a compounding basis. You must also avoid churning your portfolio.

6. Understanding the Types as well as Categories of Mutual Funds:

We must first try to understand what are Mutual funds  by asset class (stocks, bonds and cash). They are also further categorized by style, objective and even strategy. If one can understand this classification then he/she can invest in mutual funds as per their goal. The equity and debt funds as primary fund types have dozens of sub-categories that further describe the investment style of the mutual fund.

 7. Design Your Portfolio of Mutual Funds:

We must always try to make a portfolio of Mutual Funds. One can use different strategies and objectives to build one but we must know that there are some basic features that do not change. To build the best portfolio of mutual funds you avoid going by the same old way. One must have a good combination of mutual funds and the portfolio should be well structured in accordance with time.

8. Go for Tax-Saving Solutions:

We might have heard the term Equity-Linked Saving Schemes (ELSS). In this case, the investment gets eligible for tax deduction under Section 80C of the Income Tax Act. These are equity funds with a three-year lock-in period and are the first choice of many first-time mutual fund investors.

SSA INVESTORS specializes in selling money market instruments and also provides risk cover through insurance products to individuals and corporates catering to their specific needs. We offer these specific solutions to our clients – Investment Advisory Services, Mutual Fund Advisory, Fixed Deposit Services, Tax-saving solutions, Insurance etc. We are one of the best Financial Advisors in India operating from Rajarhat in Kolkata. We hope these tips to invest in Mutual Fund will help you to make appropriate decisions in future. Now, investing in Mutual Funds became easier than ever. Start investing in Mutual Funds now!

You may also like:

Why Should You Invest in Mutual Funds?

What are mutual funds?