Investing in equities is a good idea and a great decision. After all, you can start investing in it with just Rs 500 a month if in Equity Mutual Funds. There is a good portfolio diversification too. It is professionally managed as well.
However, you will have to bear in mind these tips while investing in equity funds. India’s First Free Online Financial Advisory, Moneymindz
1. The Proof of the pudding is in the eating
You will know the taste of the food only after tasting it. Similarly, you should try out new avenues and explore things. Don’t stick to your comfort zone. Don’t be obsessed with only a particular fund. Only when you go out there and try new funds, you will know which one to hold on to and which one to discard. This way, you can get rid of the underperforming funds and move on to better performing funds. Get Personalized Advice On Equity Mutual Funds From Kuber Mindz or Give A Miss Call On 022-62116588
2. While evaluating funds, check the TRI
Total Returns Index (TRI) measures the performance of a group of components by assuming that all cash distributions are reinvested. It has to measure index returns including dividends which your fund receives from companies. India’s First Free On call Financial Advisory, Moneymindz
3. Check the AUM of the funds you are investing in
Asset Under Management (AUM) has to be huge. The larger AUM is, the better it is. This is because the pressure of redemptions and sub-optimal decisions, along with the costs, is lower in larger funds Smart Financial Advisor, Kuber Mindz.
4. The consistency of fund performance
You have to check how consistent your fund’s performance is. How predictable your fund is matters. When you buy equity funds, you expect consistency and predictability. If you didn’t want consistency and predictability, you would go for more volatile investments. But you are investing in equity. You should know how predictable the fund performance is. Get Personalized Advice On Equity Mutual Funds From Interactive Financial Advisory, Kuber Mindz or Give A Miss Call On 022-62116588
5. The consistency of policy and strategy
A fund where the key people keep changing frequently shows red signs. Fund teams that build rapport do so because they stay together for a long time. But when you observe people going in and out of the fund, you start to question the fund strategy. A change in management plays an important role in fund performance and strategy.
6. Do your homework before investing
Never invest randomly. Take your time, find out about the company (its past performance, its previous fund managers and their qualifications and experience apart from their performances in the fund, etc). If you don’t understand something, there are people here to explain it to you.
You can always www.moneymindz.com for more information or give a missed call to 022-62116588