Goal-Based Investment? Time to Choose Mutual Funds

Most of us look for low-risk investment options, which can provide maximum returns. This is one of the reasons why many shy away from direct equity investments. In such a case, investors can buy direct mutual fund online and earn good returns. 

Mutual funds are ideal for those who do not have good finance knowledge. Investors get to choose from equity mutual funds, hybrid or debt funds. Also, within each of the mutual fund categories, there are various sub-categories which you as an investor need to be aware of. For example, the equity mutual funds are further classified into large-cap, mid-cap funds and so on. You need to plan for a good portfolio by taking all the categories as well as sub-categories into account. There are a number of individual schemes that you can consider as well.

Why are mutual funds perfect for a goal based investing? Well, you can invest in smaller amounts when you are investing in mutual funds. A number of funds allow investors to invest about Rs.1000 per month, and this makes it easy for people from low-income groups to invest. If you wish to invest keeping a goal in mind, systematic investment plans are the best way to start investing. If you are a salaried employee, you can invest in SIPs every month with ease. 

With SIPs, investors are at an advantage as the funds are invested in markets. So, with time, investors reap the benefits of rupee cost averaging, and thus will make good returns over a period of time. 

If you wish to save for a goal, always consider saving in small amounts rather than making a lump sum investment. If you are looking for long-term returns, invest in equity mutual funds. Why? Sensex has provided compounded returns of more than 18% from the past 32 years. Hybrid funds too invest a large portion in debt and have a good exposure to equity. If you do not want to take a lot of risk, choose hybrid funds over equity mutual funds. 

Mutual funds thus provide amazing products to address the financial needs of people from different backgrounds. Make sure you have a good portfolio to reach your financial goals with ease. Remember that regularity in monthly investments and reviewing your portfolio play a major role in obtaining profits.

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