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Tips on selecting the best mutual funds

by barneytalukdar

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With the growing cost of living, people today seek to invest their money in the most profitable plans to save enough for the future. Today the market provides investors with special plans that let them invest systematically for specific needs like child plan, retirement plan etc. Mutual funds in Indiaare extremely popular when people seek to invest for such defined requirements. However, it is important that you make the right choice while selecting a mutual funds investment plan, or else you could be losing time behind investing in a plan that doesn’t yield much.

Many feel that while selecting a mutual fund all you need to look at is the indices and the past performance of the plan. But there’s much more that you need to consider while making your choice. A very important thing that you need to keep in mind is that no investment gives you immediate gratification.

If you are looking out to invest for savings purpose then you should pay attention to reducing risks. High risk factor will be detrimental to your interest. The best way to invest for you is through mutual funds investment plans. These plans have around 50 stocks in each portfolio that gives you diversification and cushioning from the risks. There are several providers for mutual funds in India. This choice could be baffling. Many a times investors make a wrong selection to realize later that they’ve lost on good investment opportunities. So, read on a few tips that’ll help you to select the right mutual fund and avoid making any mistakes –

• Before you zero in on any mutual funds investment plan, know your requirement from it. As mentioned before, there are different schemes for different requirements in the market like retirement plan, capital growth etc. you must also be clear about your time frame and the returns you want. It is important to remember that equity funds are not advisable to meet a short term goal because of their long term nature. If you need to fulfill a short term requirement then you can consider money market and floating rate funds. To sum up, you need to ask yourself, what kind of mutual fund is the best for me?

• After you’ve decided on the plan you want, research on them and get as much information as you can. Learn about the different providers in the market and how the plan works.

• When short listing companies to buy plans from select companies that have been performing well consistently. You can use the industry indices to compare different funds as well as different plans offered by the companies.

• Before investing in a mutual fund understand the fees and other costs of the plan. Also, know how these would affect your returns. The best kind of mutual fund investment plans have lower cost and fees attached to them.

Investing in mutual funds online is a convenient mode of opting for a plan. It gives you the convenience of researching, comparing and hassle free buying anytime anywhere. So, the now when you plan to get a mutual fund investment plan, consider getting it online.

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