In this article we will teach you about How to Invest in Mutual Funds in India. The Asset Management Company (AMC) brings all the investors together, in order to invest on the various Mutual funds schemes. The profit is distributed among the investors by the AMC after taking their share. The Association of Mutual Funds of India controls the proceeding of Mutual funds in the market.
Firstly, you should decide the type of portfolio you are looking to build. Asset allocation is the first procedure to invest on mutual funds. A sound risk profile should be balanced according to the age of the investor. Taking too much of risk may cause a major loss to the investor, especially if he is not that young.
Secondly, you should decide on the type of funds to invest. The shortlisting and comparison should be made based on the performances of the company in the past and its reports. Select superior funds with regards to your goals, time limit and risk profile.
Thirdly, give importance in diversification of funds as it lowers your market risk. This helps to get a higher profit in spite of investing in low risk schemes. Make sure that you have a mix bag of equity, debt, money market, and hybrid, closed-ended and open-ended mutual funds.
Finally, once you are done with submission of scheme related documents, your work is not over as you have to follow up your investments in the market. Net Asset Value (NAV) varies each day and you have to keep track of the rates daily through various sources. The online websites provide the required past and present performances information. The newsletter of each quarter will publish the portfolio information and fund manager’s report of the AMC. The scheme related data and prices are printed on the financial newspapers also. Nowadays, mobile applications make follow up of investment easier. I hope we have taught you the basics of How to Invest in Mutual Funds in India.
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