Tips for the Mutual fun investments !

Hi Folks,
I m new at the mutual fund investments please mention some tips for me so it will helpful for me and also reader of this thread.

Lot many investors come with a query “ I haven’t invested before…which mutual funds scheme should I choose”. And rightly so. With so many schemes in the arena, it is a humongous task to for any first-time investor. Any bitter experience initially can deter you away from the equity markets. Hence, there should be a wiser approach when you are planning to invest for the first time. Here is how a first-time investor should look at starting investing in mutual funds- 1. Define your horizon- Any investing avenue cannot be selected till you are not aware of your investment horizon. Many a times when you when you make the investment without any specific goal behind it you get inclined towards the returns and so you get lured by the best funds of today. Such decisions have the higher probability of going wrong. So it’s wiser to define clearly what is the time period you can hold your investments i.e. when you will liquidate this money. This specification will tell you whether you are looking for a short term, medium term or a long term investment. 2. Assess your risk tolerance- Each one of us has our comfort ability with the volatility of markets. We may divide it into aggressive, moderate or conservative, but there is the host of factors which decide this. While making your first investment if you have dependents or liabilities then you may not be too aggressive. Similarly, if you are starting when you are young and no dependents then you can afford to be aggressive. Also, your awareness about asset classes may have an impact on your tolerance for volatility. So you need to analyze how much volatility in your investments you will be able to tolerate. 3. Choosing the scheme- There is no second thought that asset allocation is the right approach for making your investments. But when you are starting small you may be looking to gain exposure to the equity market with this investment. If such so then starting with balance funds is a good choice. With a judicious mix of equity and debt, they are able to deliver good performance and keep your downside protected. But what if you need to create an investment portfolio. How should you do it the first time and what schemes you choose? Here you should build this portfolio gradually. Your debt investments have many choices like PPF, EPF etc.. and so factoring these you can decide to invest in debt mutual funds. Within equity, it’s wiser to start with few large-cap schemes along with balanced mutual funds scheme initially and add other categories as you become more aware with mutual funds. For a larger portfolio, it’s advisable to take the assistance of a financial planner so that you do not make a mistake. 4. Avoid aggression - Many times when investing for the first time you get lured by the exceptional returns from a particular fund or advised to invest in a sector which is going to do well. All this is fine till you have sufficient knowledge. Even then taking a risk higher than your tolerance will a have the higher probability of giving you opposite results. So avoid high-risk categories on first investments. It’s important that you have a control on your expectation and build it around your financial goals. Start with a diversified fund like a balanced fund or large-cap schemes and do not invest for higher returns. Stick to your investment objective. 5. Read before you invest- there is no dearth of information and when you are investing for the first time it’s good to know a bit about it. Go through some good books or follow some blogs to get awareness about investing. Post your queries on blogs so that you get views of experts on your doubts. This awareness will help you in falling prey to mis-selling. You may not be able to analyze a fund deeply, but a basic knowledge will tell you what approach to take and what questions to ask. A first experience in any volatile investment has to be wiser so that it can give you the confidence of investing more. Much relies upon the approach you take. Beware of the pitfalls and approach gradually rather aggressively to ensure you lead yourself to a better wealth creation.

Mutual funds refer to be the best investment options for those who want to earn higher in a short span of time. There are much more thing that you will get with the help of an effective portal like Tradebulls. It will teach you with all the needful tactics to grow better.

Investing in mutual funds is a challenge for us as it is extremely baffling to figure out the right scheme from numerous mutual fund schemes.
Here're a few tips for your help to keep in mind while investing in Mutual funds:

A) Try to understand the fund in which you are investing
B) Check the past performance of your mutual fund
C) Do not commit common mistakes
E) Stay invested for a longer period of time

Investing in mutual funds is a challenge for us as it is extremely baffling to figure out the right scheme from numerous mutual fund schemes.
Try to keep these tips in mind while investing in mutual funds:
Draft an Investment plan: Before deciding the type of fund you are going to invest in, design an investment plan for yourself.

Try to understand the fund in which you are investing: Before choosing your scheme try to get a distinct idea about the type of fund in which you are investing.
Don’t avoid index fund: Mutual fund investors often ignore a simple low cost index fund in favor of the high-cost actively managed fund. This is a mistake.

Beware of fund robbers: Invest in mutual funds which guard you from the five major fund robbers namely; inflation, market volatility, income tax, interest rates and incorrect asset distribution.

Sure! Mutual Fund is the best way to invest when one don't have knowledge how to trade in stock or any financial knowledge, or one don't want to put heavy risks at all.
Let me tell you how. In Stock Market, you invest in one company. When company rises, you get profit, but when company loses, you get loss. It's a direct proportion. Usually, one company has more huge falls, and huge rises as well. Not advisable for those who don't have knowledge.

And Mutual Fund is not like that. There is professional fund Managers who will manage not only your money, but a pool of money from all who invest in the particular fund. And the fund manager invests all those money into different securities (such as stocks [Equity], bonds & debentures [Debt], money market, etc.) on investors' behalf. Remember, Mutual Fund is like many investors sends money to fund manager, and fund manager invest money into various companies with different industries, different instruments, and when there are returns generated, it will passed back to many investors. And don't worry about fund manager, Mutual Fund Regulator, SEBI, is watching them.
Here is a figure below to understand better.

Since Mutual Fund has large diversification, that represents least risk possible as individual risk is spread to many investors and it's best suitable for long term as we can see the main indicator Sensex (which holds top 30 companies) rose from 100 points in 1978 to about 35,000 in 2018, it's 34900% rise in the span of 40 years.

Now it's time to give you example of Mutual Fund:
There are two main different ways to invest in Mutual Fund: Lumpsum and SIP (like the ways of FD and RD respectively).
If you're to invest periodic investment (SIP) of Rs. 1,000 every month today, then in next 30 years (assumed 18%, some gives 25%, some gives 15%, so I assumed 18% as average annual return).
The total investment you made for 30 years amounted to Rs. 3,20,000, but at the 18% average return, you'll get at the corpus of Rs. 1.03 crore. You may be shocked now. But that's how Power of Compounding works.
Please google Power of Compounding. Albert Einstien quoted it Eight Wonder of World. The longer you invest, the higher it multiply.

Now you might say, which fund to invest?
• In case, if you like to invest for tax saving under section 80C, then go for "Aditya Birla Sun Life Tax Relief 96 Fund" [ELSS Fund], which is recommended. It is like PPF, but PPF offers just 7-8% and have 15 years lock-in period, whereas ELSS provides more than 12% and have 3 years lock in period only. But you can stay invested for longer period of time.
• In case, if you're to invest for aggressive returns but with higher risk, then go for Small Cap Funds such as "Franklin India Smaller Companies India, or Reliance Small Cap Fund" but it's not advisable for longer horizon. Otherwise, keep tracking.
• In case, if you're to invest in well-diversified with handsome returns (less risk than small cap one), then go for Diversified Fund such as "HDFC Small Cap Fund". Suitable for longer period of time.
• In case, if you're to invest in least risk with purely fair returns (less than diversified fund), then go for large cap such as "HDFC Top 200 Fund"
• In case, if you're conservative investor with very least risk but with less return, then go for Balanced Fund or Debt Fund such as "HDFC Balanced Fund"
Remember, when I say risk, it does not mean that you will lose money. Maybe you'll lose just 5-7% under 6 months, but that's not what you have to look at. Because I know that it will recover very soon as India is developing very well in terms of economic and business. When I say higher risk, it represents higher fluctuations. It means when there is rise, it rises higher AND when there is fall, it falls lower.

This is very long, and it's not like an end. But I've covered the major points which you need to know.
Any further question, please feel free to ask.
PS: All funds that I used as examples are my recommended ones.

Here are some simple tips for investment in mutual funds: 1. Take time to research 2. Never invest in bulk 3. Seek advice from experienced people 4. Go for SIP investment plan if you wish to play safe.I would recommend Kotak Mutual Funds SIP investment plan for better returns.

Many novice investors mistakenly believe that all mutual funds are the same but that’s simply not true! Mutual funds are subdivided into various categories including equity, debt and hybrid funds with each of those featuring further subtypes. These key types of funds differ on the basis of key factors including but not limited to investment horizon, thematic exposure, asset classes the fund is invested in and tax-treatment. Due to this diversity that mutual funds offer, you might feel overwhelmed with the sheer volume of choices. In the following sections we will share 6 tips to help you get the best returns on your mutual funds investment:
1. Understanding the Risks Involved
2. Keep your Investment Objectives Clear
3. The NAV Does Not Matter
4. Diversify Your Investments Over Time
5. Consider a strategy focused on long-term growth
6. Periodic Monitoring is Essential to Success

While investing in Mutual funds here are some few tips to keep in mind:

1. Always take tips from your friends or family members who have done similar kind of investments. A careful research search can help you in selecting the best fund for you.

2. An ideal fund is one that provides relatively good returns than its peers for an equivalent amount of risk taken. Balancing these factors can help you maximize returns by taking calculated risks. For this, it is important for you to analyze your risk tolerance.

3. Do not try to time the market. Even the best professionals in the business cannot time the market reliably. In the short term, fluctuations in the market will not really affect you much, since most people usually make investments for longer periods of time.