Tuesday, August 12, 2008

Keep it simple & be happy!

Before you loosen your purse strings, here are a few things you need to check on while investing for the long term

The growth in mutual funds AUM in the last five years is a testimony to its growing popularity as a long term savings and investment option among investors. Sustained inflows into MF schemes investing in equities, fixed income or even gold suggest increased investor sophistication and also broad-based investor interest. And why not, as investment through mutual funds are fairly simple and offer the most convenient and effective mode, especially for the small retail investors to channelise their savings in building long term wealth. But consider the following steps while investing your savings in mutual funds:

Achieve your long term asset allocation through mutual funds: A long term asset allocation plan for most investors would involve investing in asset classes like equities, fixed income, gold and real estate. With the advent of the Gold ETF and Real Estate Mutual funds, mutual funds can satisfy the basis asset allocation needs of most investors. Mutual funds offer investors the advantage of pooling of resources, professional research and investment capabilities, tax efficiency and easy liquidity and are most suitable for the retail investor.

Keep your MF investments simple and regular: Do not get carried away by fancy scheme names and big bang NFO’s; focus on your overall requirement and decide on your investments. Mutual fund websites like Personalfn and Value Research provide great information and should help you choose simple schemes that satisfy your investing requirements. Else get hold of a trusted financial planner to help you plan your investments. Moreover, most schemes offer investment options like the Systematic Investment Plan (SIP) which allows the investor to invest periodically in a systematic and disciplined manner.

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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