How to choose best mutual fund if you are a beginner?
Neha Vashistha11 October, 2018
Generally most of the new investors think that the fund which provides good return is the best mutual fund. Although they are partially right. But good returns are not solely the only criteria to decide the fate of the fund.
According to me, while choosing the best mutual fund you should always consider these points-
- Your Risk Appetite- Darr ke aage jeet hai! These lines sounds good only in the mountain dew advertisement but doesn’t apply to the mutual fund space. One should know his risk-appetite beforehand. When I say risk appetite I mean your sustainability to bear heavy loses.
- Investment Amount- Don’t go bankrupt by investing in the mutual fund. Therefore, know your affordability and then decide your investment amount. SIP gives you a freedom to choose your investment amount that will be deducted periodically from your account.
- Time Horizon- After you have decided your investment amount, now comes the time to decide the time horizon. Your time horizon should be in accordance to your future goals.
- Past Performance- Previous track record isn’t a sure shot trick to choose the best mutual fund as the market keeps fluctuating but it will give you some idea about the behavior of your mutual fund in different market conditions.
That’s all from my side. These tips helps me in deciding a suitable mutual fund and I wish that it proves beneficial for you too.
Welcome to the roller-coaster ride!