The days of record rally in the stock market are back again. Both the domestic indices BSE Sensex and NSE Nifty are witnessing a spectacular boom. Nifty is soon on the threshold of crossing the historical level of 20 thousand points for the first time. In such a situation, you may also want to get the best returns by becoming a participant in the market rally, but the biggest obstacle in this may come from lack of understanding of the market.
Most important is the right choice
Mutual funds can solve your problem. However, investing in mutual funds has its own risks. You can participate in the boom of the market with the help of these funds and generate excellent returns for yourself from the rally, but for this it is necessary to choose the right mutual fund. Generally, people take the help of their past performance or fund manager and then the name of the fund house to choose a mutual fund. However, this formula is not correct.
Never do these common mistakes
Experts keep on giving instructions about this again and again that past performance is not a guarantee that the fund will give the same returns in the future. At the same time, the fund manager or fund house is also not a guarantee of returns. In such a situation, the question arises that on what basis should you choose the right mutual fund for yourself? Today we are going to help you in this task and tell you 3 such mantras, which are going to be very useful for you while investing in mutual funds.
First Mantra: Process Framework
The most important thing for achieving success in the long run is a strong process. In this context, a recent investor education campaign by Nippon India Mutual Fund becomes relevant. The campaign raised the question, what is stronger than a person’s ability? The answer came to the fore that the process of a person’s work is the most concrete thing. The only thing to be looked at while choosing a mutual fund is the working process of the respective fund.
Second Mantra: Strong Risk Management
The stock market is full of risk. Here good returns are available, as well as there is a danger of money sinking. For this reason, while choosing a mutual fund, it is important to see how its fund house manages the risk. This is the most important parameter for choosing a mutual fund. There can be risks ranging from market volatility to credit risk, interest rates and inflation. Check how your fund house manages these risks before you choose a mutual fund.
Last Mantra: Persistent Effort and Focus on Stable Returns
Market veterans always caution that investors should never fall prey to the lure of high returns. Instead, investors should focus on sustainable and stable returns. Lusting for high returns can make you lose your savings, whereas long-term persistence focusing on steady returns can create wealth.
If you keep these 3 mantras in mind while investing in Mutual Funds, your risk will be minimal and your chances of getting good returns will be maximum.
Disclaimer: The information provided here is for informational purposes only. It is important to mention here that investing in the market is subject to market risks. Always take expert advice before investing money as an investor. ABPLive.com never advises anyone to invest money here.