How to Maximise Returns in the Mutual Fund Investments?
Bull market is on a continuous hike these days. The share values are gaining great highs. The experts are of the view that in the upcoming months market would touch new peaks. Are you among those investors who are in a dilemma whether to start investing or book profits (in case of current investments)? Well, if yes, then the only solution you have is the mutual fund investments.
Since it is impossible to predict the market directions all the time, mutual funds provide a harbor to your hard-earned money. By opting for a disciplined investment approach, you may lead towards accomplishing your goals of earning high-yielding returns on your investments.
The Best Ways to Get Maximum Returns from Mutual Funds
Choose the SIP Way to Initiate - The monthly Systematic Investment Plan (SIP) is one of the most effective ways to start investing in the mutual fund plans. Every single amount that is invested in the schemes every month through SIPs creates a corpus over a period of time. By investing an amount of Rs.5000 every month via SIP for continuous fifteen years can fetch you an amount of Rs.25 Lakh at an annualised return of 12%.
Never Forget the Risk Appetite - The high-risk investors who can bear market volatility should consider investing in the pure equity plans; the investors with stable risk appetite should go with the balanced schemes, while those with low-risk profile have the option to invest in the debt mutual funds. By selecting the schemes as per your risk-bearing capacity, you would be able to fetch considerably higher returns as desired.
Make Sure You Have Investments in Diversified Categories - All the categories, as well as subcategories of mutual funds perform differently as per the market scenarios. Schemes falling in the large-, small-, and mid cap funds yield different returns as per the conditions. Hence, investing in several categories and providing wider diversification to the portfolio will let you earn higher returns over time.
Invest in the Sectors Which Are Expected to Outperform - Several investors having an aggressive risk appetite are intended to invest in the funds with an extreme risk like the sector or theme-based funds. If you are among those, you may consider investing in such sectors which are expected to outperform in the future. For example, the infrastructure or pharmaceutical industries are expected to reach new hikes in the future; you may park your monies in the schemes associated with such sectors.
Always Choose the Funds as per Your Financial Goal - Just because a scheme has offered 100% returns in the last year, you should not invest your money in the same. This is one of the biggest reasons for investment failure that people tend to park their money in the schemes on the basis of their performance or ranking in the market. One needs to understand that even if a fund is yielding maximum possible returns, it may ruin the stability of your portfolio if it doesn’t match your investment objectives. So you must associate your investment with a pre-defined goal so as to attain maximum returns.
Lump Sum Investments Can Be Made Using STP - It has been observed by the industry experts that people make a lump sum purchase in the equity schemes. Researches have already proved the systematic investment is the best way to fetch maximum growth in the equities as it provides a shield against the market volatility. Lump sum investments in equity may be a good idea during market corrections, but there also no one can be sure of the implications. So the best way to maximise returns via a lump sum investment in mutual fund is by putting the monies in the short-term debt funds, and opt for the STP to equity funds over a time period. This will simply reduce the risk of investing a lump sum in the equity fund, and your amount would be invested systematically just like an SIP plan.
Bottom Line - Accordingly, these simple principles can help you gain tremendous returns on your investments in the mutual funds. It is always recommended that instead of waiting for the right time to invest, you must take the right step toward investments as early as possible. Don’t look out for opportunities, start investing in mutual fund online now at MySIPonline and gain the best possible benefits for a fortunate future.
