How to invest in mutual funds: investment guide for Beginners

Beginners may seem complicated for first time invest in mutual funds. Investors can be confuse at the time of invest in mutual funds. Understanding how mutual funds work is the first and most important step in your investment period.

Invest in mutual fund depend upon your budget you have to invest at least 100 or more you afford. In mutual fund you buy a fund of one time invest or you can buy a fund of monthly SIP. There are many investment options  available in mutual funds. There are several mutual funds  available which provide high return to investors but these funds  have high risk and by investing in these funds investors  increase their status of  risk profile.

How Mutual funds work

A mutual fund is formed when an company pools the investors to invest in their company .  The major objective of these company to get a wealth from investors for development of company and provide good return to investors .

Investors should know full knowledge about company and its excellent track record of managing investments and have depth understanding of markets.

The investors make money in mutual funds through regular dividends/ interest of mutual fund owner company.

Why should you invest in mutual funds

Investing in mutual funds is a paperless and straightforward process by which you increase your capital. Investors can monitor the market and make investment as per the market requirement. Investors should focus on portfolio rebalancing help to keep returns as investor expect.

You can build a diversified mutual fund portfolio by investing as low as Rs 100 or more you afford by paying one time SIP or paying monthly SIP. 

Invest in  professional funds.

Your mutual fund investments are managed by a professional fund manager who is backed by management team and researchers. The management team picks suitable securities as per the fund’s investment objections to investors.

Things to consider as a first time investor

Investor should decide there budget , and time horizon plays a significant role in your investments. By doing this will help you decide how much you can set aside investing and your risk profile Investment always works best when done with a purpose of getting good return.

Choose the right fund type

It takes more than reading about different mutual funds  types to decide on the right category .  Experts typically recommend beginners to invest in balanced or debt  fund for first time invest because these funds are low risk and offering best return to investors.

Keep KYC documents updated

You cannot invest in a mutual funds if you have not updated your KYC documents.  In INDIA KYC is mandatory for all online investment by which government should identify the investor by KYC upload documents like pan  .

Online platforms available for invest in mutual funds

There are many   online  platform available for invest in mutual funds

. Kuvera

. Groww

. ETMONEY

. Zerodha coin  . Piggy

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