A new investor in Mutual Funds initially has to suffer a big loss due to many small mistakes. New investors can avoid losing their money by keeping a few fundamentals in mind. Know the main things…
Mutual Fund Investment: After Corona, the number of new investors in the Indian stock market and mutual funds has increased in crores. Retail investors are increasingly attracted to this field due to the strong returns received after Corona. However, it is often seen that the new investor has to suffer big losses due to many small mistakes in the beginning. New investors can avoid losing their money by keeping a few fundamentals in mind.
Usually fresh new investors start equity investment in a high market. At that time the existing investors would have already earned a substantial amount. Experienced investors usually invest when the market is weak. First time investors do not know about this. Therefore, while investing in the equity market for the first time, investors should take a cautious approach by investing in low-risk funds. Along with this, investors should also try to understand the ups and downs of the market. It is important for a first time investor to keep these things in mind while investing in equity-oriented funds.
Do not invest a lot of money in one go.
An investor should avoid investing large sums of money in equities all at once . This is because a fall in the market can create problems for you. First-time investors do not understand the ups and downs of the market. In such a situation, they get nervous when there is little loss. In this panic, new investors often decide to withdraw their money, due to which they have to bear the loss. Hence, it is always advisable to invest in equity-oriented funds through a Systematic Investment Plan (SIP).
Invest in Funds where the risk is low To get
accustomed to market volatility, it is better for first time investors to go for balanced funds rather than pure equity funds with high risk. New investors should invest in such funds where the risk is low or may not be high. Such funds tend to have less volatility than pure equity funds during market volatility. This does not create a panic situation for new investors. With this, new investors can stay in the market for a long time and understand the ups and downs of the market. Hence, instead of starting with high risk pure equity funds, it is better to invest in funds which are comparatively less risky.
Avoid investing money without financial planning
Investing money without financial planning If an investor starts investing in equity-oriented funds to achieve long-term goals through proper financial planning, there are chances that the investor will stay in the market for a long time. are. Investors looking to invest for long term goals tend to ignore minor fluctuations in the market. On the other hand, new investors who invest in order to get instant returns, get scared of the fluctuations of the market and withdraw their money immediately. Hence, it is better to do financial planning before investing in which category of funds to decide how much to invest.
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