Your Mutual Funds Investments Should Be Reflection of Your Financial Goals
by Manvi Jain - Jul 24, 2019
Whether you are planning for your house, child’s education or marriage, your car or vacations, Mutual fund is a simple, tax efficient and effective tool to invest for these goals.
Mutual Funds are ideal for investors who lack the time and knowledge to make complex investment decisions and yet want to get the most out of their investments.
Besides, Mutual funds offer a wide bouquet of investment options – equity schemes, fixed income schemes, money market schemes, hybrid schemes, ETFs etc. which you can choose as per your needs.
Now the decision to invest your money in any investment instrument should be based of your financial goals. Things that you need to consider before starting your investment in Mutual Funds are as follows:
1. Choose Your Own Goal- Its always advisable to start your investment based on your investment goal. It could be a long term goal (5+ years) like retirement, child’s education, buying a home etc. Or you could have a short term goal (<5 years) like saving for honeymoon, vacation with friends, buying a car/bike etc. Based on the time horizon of your goal you would have to invest in Equity and debt Mutual funds. Goal based investment is a more effective way to make money.
2. Asset allocation- Here you will need to decide how much money to invest in equity funds and how much in debt fund. This will be then the composition of your portfolio.
3. Choose the Best Mutual Fund- After the above two steps comes the crucial decision of choosing the right funds. For this you will need to do an extensive research.
You could either do all this or you could download an investment app like Mintwalk that will help with goal selection, asset allocation and they would create a portfolio for you based on your goal, risk appetite and tax bracket. I would highly recommend using an investment app; it will make investing in Mutual funds easy, simple and very convenient.