5 Things You Must Know Before Investing in Mutual Funds
Antara Bhattacharyya
Understand Your Investment Goals: Define clear financial goals before investing. Whether wealth creation, retirement planning, or emergencies, goals determine fund type, risk level, and tenure.
Know Your Risk Appetite: Assess your comfort with market fluctuations. Equity funds offer higher returns but volatility, while debt funds provide stability and predictable income.
Check Expense Ratio and Fees: Expense ratios impact overall returns significantly. Compare fund management fees, exit loads, and hidden charges before selecting suitable schemes.
Diversification Matters: Avoid putting all money in one fund. Diversify across asset classes, sectors, and fund categories to balance risk.
Review Past Performance Carefully: Analyze long-term performance instead of short-term gains. Consistency, fund manager expertise, and benchmark comparison indicate reliable investment potential.