I have never invested in mutual funds. How should I start investing in mutual funds? Or can you suggest any other good investment plan?
- Neetu
You need to first decide the time frame for your investments. No matter whether it is a regular surplus that you are able to save on a monthly basis or it is a lump sum that you have accumulated, you first have to decide the duration-whether you would need the amount within a few months or within a few years.
If you have a lump sum that you don't require at least for 5 years, then invest it in a balanced fund and spread it over a period of 10-12 months. On the other hand, if you save your money every month, start an SIP in a balanced fund. This is the best way to invest money, as you would be able to average out your investments. Just decide the amount that you would be able to conveniently spare every month and start an SIP of that amount in a balanced fund.
But make sure that you invest only in a balanced fund during the initial years. Do not invest in pure equity funds or funds that have recently given high returns, as a high rise is usually followed by a high fall. A balanced fund would help you gain trust in the market.
Also, as a first-time investor in mutual funds, you will have to get your KYC done. It's a physical form that you can submit, along with your first investment, at the office of any mutual fund company. You can get the contact details of mutual fund agents by entering your postal pin code on the website of AMFI. It is an association of mutual fund companies.
This article was originally published on April 15, 2019.
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