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Here are some quick frequently asked questions for the first time mutual fund investor.
How much should I invest?
First identify your goals; This will help you decide the amount to invest to achieve each goal.
Should I invest in equity or debt schemes?
It mainly depends on your investment objective, investment tenure and risk profile. If you are investing to achieve a short term goal that needs to be achieved in a few years, then debt schemes are ideal for you as these schemes are mostly risk free.
However, if you have a long-term financial goal that needs to be met after five years or so, you can invest in equity mutual fund schemes as these have the potential to give better returns than other asset classes.
What is the minimum amount required to start investing in Mutual Funds?
It is important to start investing and its beauty mutual funds is that you can start with as low as Rs 100 per month. The mantra is “get started and stay invested for the long term”.
If I start with Rs 100 per month, can I continue to add as my income grows?
Yes you can. In a mutual fund scheme, you can make additional purchases in the same fund.
Is Systematic Investment Plan the only way or can I invest lumpsum also?
It depends on how much money you have to invest. Lump sum investment gives longer investment time and higher returns as the power of compounding (basically earning interest on interest) builds up over time.
On the other hand, a SIP (a pre-determined amount invested at regular intervals) gives you the benefit of Rupee Cost Averaging (RCA), which basically balances out market volatility over a long period of time. Since a fixed amount is invested at regular intervals, you get a chance to buy more units when the prices go down and vice versa.
Important advice!/
Since you are new to investing in Mutual Funds, you must invest with the help of a Mutual Fund advisor for smooth onboarding, expert opinion and careful scheme selection.
about us!
Nivesh.com is a paperless experience for investors. The platform simplifies the process by categorizing funds according to broad investment objectives, and puts forward schemes to provide a shortlist. The objective is to remove complexity while ensuring an objective investment process. After the initial account creation, investors can transact in mutual funds in a few simple steps. Post-transaction, the platform helps track portfolio performance with timely alerts and notifications.
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