TomorrowMakers

The mutual fund universe is vast. There are different types of schemes – equity, debt, hybrid, Exchange-Traded Funds (ETFs), international funds, etc. Each fund invests in a different asset class and has a different risk profile. You can choose the growth option to grow your investments or the dividend option, which pays regular dividend income. With so many options available, here’s a quick guide to mutual fund investments for beginners.

• You can invest in mutual funds in a lump sum or in instalments through SIPs

• To invest, you can buy directly from the AMC, go to online investment platforms or connect with individual mutual fund brokers.

• When investing, evaluate your risk profile, financial goals and investment horizon to choose the right scheme.

• Start small and build up a diversified portfolio with regular investments to create the corpus for your goals

Investment Mode

• Lump sum – Here, you can deposit a lump sum anytime you want to invest.

• SIPs – Through this mode, you can invest a fixed amount after a specified interval, usually monthly. There is a step-up option, too, wherein you can increase the SIP amount at regular intervals, say every year or once in two years.

Also Read – Find out how mutual funds work

How to Invest in Mutual Funds?

To invest in any scheme, you have the following options –

• Online or offline through the Asset Management Company (AMC)

• Online investment platforms

• Individual Mutual fund brokers

Tips for Investing in Mutual Funds

Now that you know how to invest and the investment mode, here are some tips that would help you choose a suitable mutual fund scheme –

• Assess Your Risk Profile

This would help you choose a fund that matches your risk appetite. For instance, if you are an aggressive investor, you can invest in equity funds, but if you avoid risks, debt funds would be a better choice.

• Start Small

When starting your mutual fund journey, start small. Invest in one or two schemes, understand how the investments work, and then build your portfolio.

• Build up a Diversified Portfolio 

Invest in a mix of equity, debt and hybrid funds to diversify portfolios. Diversifying across the available funds minimises risks and enhances the return potential even under each asset class.

• Invest According to Your Goals

Identify your goals and then invest to create a corpus for such goals.

• Invest Regularly

Choose the SIP route and invest with discipline to build a good corpus with time.

Click here to read the latest articles on Mutual Funds 

The Bottom Line 

Mutual fund investments are becoming popular for their return potential and the expertly managed diversified portfolio offered. Start your investment journey with mutual funds and achieve your financial goals.

Also Read – Know about the different types of funds in mutual funds