If you want more returns, then Mutual Fund is a good option for you. Experts say that mutual fund investors have benefited a lot during the Corona period. However, this situation may not always be there, as the market has reached record highs in a very short period of time after a major fall. Now investors have to take care of some things before investing, only then you can get a big return.
Choose SIP instead of lump sum
If you want higher returns, then Systematic Investment Plan (SIP) is a good option for you. You can get good returns in a few years through SIP. Experts say that investing in SIPs with a small amount can be started in mutual funds. There is also less risk and returns are also good. At the same time, when there is a big fall in the market, it is advisable to invest a lump sum.
Can choose direct plan
Apart from this, Karthik Jhaveri, director of Transgender Consultants, told Hindustan Times that investors should invest in a direct plan rather than a regular plan of a mutual fund, as it gives one to 1.5 per cent higher returns. This is because investors do not have to pay brokerage in the direct plan. However, it depends from one plan to another.
Who is a good option in debt or equity?
Mutual fund houses provide investors with the option to invest in both debt and equity. Experts say that risk-taking ability decreases as people age. In such a situation, investors should reduce their age to 100 before investing in equity. That is, if the age is 40 years, 60% of the portfolio’s money should be invested in equity. Equity always gives better returns than debt, although there is a greater risk.
Keep diversity in the portfolio
Pankaj Mathpal, MD, Optima Money Managers told HT that mutual fund investors should diversify their portfolios. This helps in reducing the level of risk. Investors should invest in small-cap, mid-cap and large-cap funds as per their risk appetite. A high risk investor should invest 60 per cent of his fund in a small-cap, 20 per cent mid-cap, 10 per cent index fund and 10 per cent in a large-cap.
Keep reviewing the portfolio
According to SEBI registered investment advisor Jitendra Solanki, a mutual fund investor should review his portfolio periodically. The investor should mandate a review on a quarterly basis, not the project. If a fund is not giving the expected returns, then it should take out its returns and invest in another fund.
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