5 Key points to keep in mind for budding investors

Why are you investing?

This is the first and the foremost question that comes in your mind if you have thought about investing in Mutual Funds. This is because investing in Mutual Funds requires certain pre-set objectives that are supposed to be achieved in a specific time-frame. There could be one or more than one objective; these could be long-term goals or short-term goals for instance, you are planning your retirement, or you want to fund your education which could be a little expensive, your wedding or the most coveted international vacation. This also determines the component you wish to invest in Debt, Equity or a blend of both. There could be a variety of reasons to invest in Mutual Funds. It is always better to have a plan in place to benefit the most otherwise it could be just a vague investment option.

How are you going to invest?

To fuel the fulfilment of your goals, you need to plan your pattern of investing in a particular Mutual Fund scheme, and of course select a scheme which is the most compatible to you. New investors who wish to invest in Mutual Funds can start by investing in Systematic Investment Plan (SIP) which could be ideal for long term investor, however not specifically. Although, it is a facility where an investor can make investments on a regular basis. A Mutual Fund scheme usually has three investment options, i.e. Growth, Dividend Reinvestment and Dividend Pay-out. 

Stay focused

Last but not the least, staying focused is the most important point to bear in mind while beginning to invest as market volatility tends to distract new investors and that’s the time when investors panic and redeem their investments, which deviates them from achieving their financial goals. Under any circumstance, investor should stay focused and not panic if the market is manic, as market turbulence is a short-term transition and the market will bounce back sooner or later.