Best Mutual Funds to Invest in SIP: Key Points To Note for High Returns
Are you planning to invest in mutual funds? If yes, then it is mandatory that you take a few important steps. Before starting with the process of investment, you need to understand in-depth the concept of mutual funds, how it works and other related details. By knowing these beforehand, you can take the right decision and gain benefits in future. For those who are unclear as to what a mutual fund is, it is nothing but an investment platform. The professionals at various fund houses analyze the funds and invest them in various bonds and stocks. So as the stock value goes high, your investment amount will also increase.
There are many positives and negatives associated with mutual funds. One needs to have a clear understanding of the pros and cons before venturing out into the world of mutual fund investment. Once you invest your amount in a fund house, the professionals will take it over from there. They will allot the specified funds that are likely to yield more profit. These experts have years of experience in the field and will be able to judge when the market values rises or drops. They will then make the switch between funds or change the investment to avoid risks and money loss.
An Insight on Mutual Funds: A Guide for First-time Investors
In addition to mutual funds, the fund houses also provide an array of other reliable services. Some of them include sales and accounting, customer service, financial consulting, and more. For those who wish to start an investment without spending much, sip would be applicable. SIP – Systematic Investment Plan helps clients make a considerable amount as investment without having the need to burn a hole in their pocket. One of the best things about sip is the fact that the investment amount can be as low as INR 500 and can be changed as per the needs of the client. You have the options to make monthly, weekly or even quarterly payments.
Choosing the best mutual fund can be a daunting task if you are unclear about the entire scenario. Here are some questions that you need to ask yourself before getting started.
- What is my future goal?
- How much returns am I expecting?
- How much should I invest to attain my future goals?
- How much amount will I be able to set apart every month?
- For how many years should I make the investment?
- How to find the best sip plan?
- Will I be able to switch sip plans after investment?
These are some basic questions that will help you get started with the entire process of online investment. When it comes to mutual funds, there are basically two main types namely the close-ended and the open-ended scheme. In close-ended plan, the maturity period is fixed whereas in open-ended it is not the case. Many opt for open-ended scheme as they can withdraw and quit anytime they want. In open-ended scheme, customers can enter and exit anytime they want, which is also apt for investors. So if you wish to choose the best mutual fund, you need to make a note of some important key points such as
- Investment objective
- Fund history
- Financial ratios
- Expense ratio
- Performance of fund manager
When it comes to mutual funds based on assets, there are three types – hybrid, equity and debt funds. You can also pick the mutual fund of your choice based on investment objective that include growth funds, income funds and balanced funds. Customers can also opt for specialty funds that include index funds, sector funds, regional funds, and tax-saving funds.
Best Mutual Funds to Invest in SIP: At a Glance
Whether you wish to invest a large sum of money or stick with a limited amount, sip would be the right choice. In sip investment plan, one has the option to invest a specific amount over a stipulated period. Based on your requirements and financial goals, you can choose from three types of sip plans that are mentioned below.
- Short-term investment is best suited for those who plan on investing within a short time period ranging from 3 months to 2 years. This is best suited for those who wish to set aside some amount for emergencies.
- Medium-term sip plans are suitable for those who have a short-term financial goal. The time duration ranges from 2 years to 5 years.
- Long-term sip plans are apt for those who wish to save money for the long run such as retirement, child’s marriage, education and more.
Based on your financial goal and income level, you can filter the best mutual funds to invest in sip and get started right away. Here are some tips that will help you pick the best sip plan.
1. The first and foremost thing to be taken into account is your investment amount. Determine how much amount you will be able to set aside as investment every month.
2. The second thing that you need to consider is the type of fund house that you wish to select for your sip investment. To do this, you need to compare all the fund houses that provide sip plans. This may be a tiring task, but it is essential to filter the best fund house.
3. The third thing to be taken into account is the historical performance of the fund that you wish to select. This is yet another crucial step that cannot be overlooked. By analyzing the historical data, you will be able to identify if the funds will perform well in the future.
4. Last, but not the least, get expert help when it comes to choosing the best sip plan for your future. Many sites come with professionals who have years of experience in the field of online investment. You can get in touch with them and get the necessary details as far as mutual fund investments are concerned.
Once you choose the right sip plan, all you need to do is fill out the necessary documents and get started right away. The process is quite simple and does not involve a lot of paperwork. There are also options where you can withdraw the amount or even close the account. So why wait? Choose the best sip today!
