Smartest investment and life plans in UAE
Invest smart today for a better tomorrow
Smartest investment and life plans in UAE
The market today is filled with dozens of options that make it tricky to choose and invest in the best mutual fund. Financial advisors and experts emphasize choosing mutual funds based on investor’s needs and their appetite for handling risks instead of solely focusing on the returns they offer.
Mutual fund investments are subject to market risks and therefore before investing a portion of earnings into any investment plan, one should engage themselves in proper research, analysis and then decide to choose the best mutual fund or investment program.
If you are planning to invest your savings into mutual funds, this article will help you to choose the best mutual fund for you.
The first step before investing in mutual funds or any other investment program is to identify your investment goal. Investors should assess their appetite for risk and the duration for which they want to invest.
Mutual funds offer several customizable schemes to suit varying investment objectives and appetite for tolerating risks. Investors should initially identify their goals and the duration of investment followed by their need for a steady flow of income and the tolerance capacity for risks.
According to financial experts, investors should always choose mutual funds or investment programs based on the plan’s compatibility with their needs instead of solely focusing on the return component. For long term investors, the best mutual funds options to consider may include equity-oriented funds because of the returns they yield in the long run. Similarly for short term investors, liquid funds or debt funds are much suitable as it allows investors to exit the program anytime without bearing the loss of capital.
Although future returns are independent of the fund’s performance in the past, it always a wise decision to evaluate the performance of the fund in the past.
The evaluation should include parameters like performance against the specified benchmark, consistency, volatility, efficiency of management, etc.
The decision of choosing the best mutual fund should never be centered on the fund’s performance in the past solely. Likely, a fund that performed extraordinary last year may not be able to keep up the same level of performance in the current year. Therefore best mutual funds should be chosen based on their consistency.
Mutual fund companies make their living by charging fees for managing the investor’s funds. Several mutual funds have entry and exit fees for investing in the program. Fund management charges levied for entry and exit of the program are some of the vital factors to consider while choosing the best mutual fund. The cost involved in the mutual funds involves ‘net asset value’ or NAV that affects the overall returns of the scheme.
Before choosing the best mutual fund it is always recommended that investors should compare a variety of funds and after thorough research, analysis and comparison choose the best mutual fund.
While making the comparison between mutual funds investors should consider factors like the grounds of risk, returns and the overall cost of the fund.
SIP or systematic investment plan approach to mutual has multiple advantages in different market situations. SIP approach diversifies the investment portfolio and mitigates the risk associated with the investment program. Although SIP does not ensures one hundred percent protection against potential risks but it reduces the risk factor involved with the best mutual funds.
Wrapping it up!
Selecting the best mutual fund depends upon an individual’s goals, financial requirements, time frame, and the tolerance capacity for the risks. Proper research comparison assessment and analysis can help investors to reach a rational conclusion.
With respect to the current market scenario, a mutual fund is an outstanding method of parking your savings securely. Investment in best mutual funds allows investors to gradually accumulate and multiply their savings which will help them to build a corpus for their futures to lead their lives peacefully without any financial constraints.