How to Start Investing in Mutual Fund?:

Mutual Funds includes a variety of investment assets which gives the investor or the trader choices to choose for.

Mutual Fund is useful for both the long-term and for the short-term.

Mutual Fund is the collective pool of investment that is actively managed by the active fund manager.

So, now you are a beginner and want to learn more about the mutual funds, then you are in the right place.

Mutual Fund can be started with the minimum amount of Rs 500 also.

It gives the benefit of diversification to the investors or the traders.

In this, you can also start your investing without requiring to open the Demat account.

So, we have already posted many of the blogs particularly for the mutual fund, so you can find there and read them it will be useful for you.

Okay, so next moving into the mainstream “How to start investing in mutual fund?”

Ways for investing in Mutual Fund

  1. Offline investment contacting the broker
  2. Online investment through the web site
  3. Offline investment through the fund houses
  4. Directly from the application

These are the different ways from which you can invest in the mutual fund and at last, the choice and decision is with you at what way do you want to make the investment in.

How to start investing in Mutual Fund?

Before deciding about whether to invest in the mutual fund or not, you need to understand some factors which will be beneficial for you.

1. You need to make the decision from where to Buy Mutual Funds

At First, you need to make the decision whether to start investing from online portals or from the offline brokers.

Most of the investors or the traders will opt for online portals as it seems easy and friendly to use.

But if you choose the offline broker then you need to consider about the different parameters for that likewise:

  • Choices in the funds
  • Affordability
  • Research and Educational Tools
  • It should be easy to use.

2. Also to identify the purpose of investing

This is the primary step towards investing in the mutual fund company. 

You would like to outline your investment goals which might be buying for a house, child’s education, wedding, retirement, etc.

If you are doing it without a selected goal, you ought to a minimum of having a clarity on what quantity wealth you would like to accumulate and in what quantity time. 

Distinguishing about the investment objective which helps the investor to make the investment choices supported level of risk, payment technique, lock-in amount, etc.

3. Fulfill the Know your customer requirements

In order to start the investment in the mutual fund, the investors or the traders need to comply with the KYC guidelines.

For completing the KYC process, an individual investors or the traders need to submit the copies of the Permanent Account Number (PAN) Card, current proof of address, age proof and many more that will be specified by the fund house.

But don’t forget to complete the KYC process, before you start to invest in the mutual fund

4. Get a brief about the schemes available

The mutual fund market is flooded with choices.

There are unit schemes to suit virtually each want of the investor or the traders.

Before investment, make certainty that you’ve got done your preparation by exploring the market to know the various forms of schemes out there.

Once you’ve got done that, align it together with your investment objective, your risk appetency, and your affordability and see what suits you best. 

Get the assistance from the financial advisor if you’re undecided regarding that schemes to speculate in.

In the end, it’s your cash and you would like to confirm that it’s accustomed to fetch most returns

5. Don’t forget to consider the risk factors

As everything comes with risk and rewards and so as the mutual fund also.

It also comes with a set of risks that you need to consider before starting the investment in the mutual fund.

Always remember that when the schemes offer the high return then it is also associated with the higher risk factor.

If you choose the high risk appetite and want to opt for higher returns than you can make the investment in the equities.

Or else, you choose for low risk then you can choose the debt type of schemes that comes with low risk and low return.

Why should one choose to make investment in Mutual Funds?

This might be in your thought also that why to choose the investment in the mutual funds, what are the benefits and why?

Don’t worry read the below points to understand what and why of investing in the mutual fund.

  1. It is professionally managed
  2. Gives Higher Returns (Depends)
  3. Provide Diversification
  4. It is Convenient
  5. Can be done with Low cost
  6. Need to make the disciplined investment

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Author

Prashant Raut is a successful professional stock market trader. He is an expert in understanding and analyzing technical charts. With his 8 years of experience and expertise, he delivers webinars on stock market concepts. He also bags the ‘Golden Book of World Record’ for having the highest number of people attending his webinar on share trading.