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How to select the ideal mutual fund?
Posted on: 31/Jul/2018 10:22:28 AM
It is essential that the investors in mutual fund conform to the risk undertaken by them. Those who keep following the trend in mutual funds investment would have noticed that the dividends have not been good as per the expectations.
Though the mutual fund market is subject to be affected to a certain extent by the stock market, those who have invested in medium and small gap plans are anxious as their expected benefits have been reducing.
As this trend has been persistent for a long duration, these investors have been compelled to ascertain whether it would be wise to sell their investments.
The experts in this field observe that though it is only natural to anxious when the expected benefits have not accrued if the investors keep monitoring the risk aspect, this anxiety could have been prevented.
When investing in mutual funds with the risk aspect, the investors need to check whether the risk element of the limit affordable as per their financial status. ,
All the investments are subject to the certain extent of risk. Also, it is true that the schemes yielding higher dividends will carry a larger quantum of risk. If the risk is less, the return also will be accordingly less.
There several kinds of mutual funds. The risk aspect varies from one another. For example, the equity mutual fund investment made in the stock market tends to yield good benefits only in the long-range. However, this carries a higher risk aspect. Whenever the stock market is down, the benefit of these mutual funds also will be affected correspondingly.
At the same time, the category of ‘debt fund’ (related to loans/debts) has a lower risk aspect. However, the returns are also medium. There are mutual funds which offer both benefits and the risk aspect.
While investing, thorough scrutiny must be done to check not only the yields but also whether the risk aspect suits the investor’s financial capacity. If an individual had invested on a larger scale hoping for a higher yield in the equity mutual funds, there is a risk of getting the exact opposite results leading to anxiety.
Some pertinent questions
However, it is also true that if one does not get anxious and keeps continuing on the investment, there may be higher yields when there is a positive change in the stock market trend. In this regard, the investor needs to question oneself whether he/she can withstand the anxiety watching the oscillating trends as affected by the stock market.
So, it is better to examine and decide aside from calculating the profit angle, whether the investor can withstand the possibility of losses during the adverse period.
Another worthy question is whether the investor can withstand watching in peace while not considering the investment benefits in a short-term approach.
Depending on the answers to the questions raised above, the investor can understand appreciates his/her own risk aspect and invests accordingly in the mutual fund. This would help prevent the anxiety while watching the adverse changes. Besides, one can avoid taking a wrong decision and stand the risk of heavy losses.
The younger generation – self-assumed d in making their own decisions
When considering the present generation, it is worthwhile noting that around 91% of the youngsters of the present generation make their own decision on these investments. Around 56% invest in mutual funds.
The highlights of the results after a survey were undertaken on behalf of the private website in 12 cities covering the younger generation:
- 57% invest in fixed deposits.
- 36% prefer to invest in Provident Fund and Public Provident Fund.
- Especially the youngsters from South India are quite keen on fulfilling their own wishes/desires.
- 80% of them have a focus on achieving high financial affluence.
- They give a high priority to physical health as well.
- They consider that foreign tourism trips, gadgets, and fashion as integral and important aspects of the personal lives.
- Buying a car also remains top among their priorities.
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