There will be hardly any household where a note on the expenses and income is not made on a periodic basis since the world has become more finance-centric now. There was a time when getting a technical qualification was regarded as a matter of pride, but now people are more inclined towards getting a finance-related degree not just for the sake of getting a job with better real-life inclination but to be applied in the personal life too.
If this is the case for managing the routine life, the planning and preparation you need as a beginner for investing in the volatility-driven mutual fund market are relatable. The degree and areas where you need to get the preliminary know-how depend on certain factors.
The first step in investing is not spending money to buy a fund
Yes, selecting a fund is the primary task ahead of any investor, be an expert or a newcomer. This selection is based on many criteria which are rather personalized, affected by the atmosphere, mindset and necessity of the person. Just like the ‘who, what and why’ of English grammar, there are some questions, the answers of which serve as the guide for a new investor in mutual funds.
The first question is obviously your intention for investment in mutual funds. What made you chose mutual funds when there are so many other assets and medium of investing money?
When you make a fixed deposit, you aim at two things. One is to save the considerably high volume of money without unnecessary spending. The second is to earn an additional income on it in the means of the interest obtained on the sum deposited for a long period of time. The combined intention of the two objectives is to have a secure financial backup for all purposes. The same user may not be served by a mutual fund. If you plan to get a good return on the investment you made and at the same time can withstand any kind of market-induced loss on the invested amount, it is a good option.
Are you planning a mutual fund investment as a backup for your retired life? If so, it is of utmost importance that the security you are trusting your money with should be able to sustain throughout the long period and give you the sweetest old age fruit.
How would you like to plan your investment portfolio? A single, lumpsum investment with the most assured returns or a collection of assets with different features to give you the challenge of a financial activity on the edge? The ideal funds for either scenario are different and again your decision-making power determines the goal achieved.
How long are you intending to stay close to the mutual fund market? Is it a short-term test drive for discovering a quick-learning platform or an opportunity to test your efficiency in making smart choices with lots of inputs? If you have the capability of sticking to your goals, the idea of investing and the plan ‘B’ for maintaining the strength of your wealth, you have crossed the first stage of mutual fund investment.