In order to accomplish the major financial goals of life like funding your child’s education, saving for retirement, owning house and saving taxes. To achieve all these financial goals it is important to have a mix of long term, mid-term and short term investments. One of the best ways to cover all these spectrum of investment is to invest in Mutual Fund schemes. Mutual Fund investment schemes provide long term capital appreciation to the investors and help them to save money for future.
Mutual Fund scheme helps to achieve different objectives of an individual and provides an option of wealth creation. One of the crucial steps of achieving your financial goal is to choose the right type pf fund to invest in. The individual should check various different aspects like the time period of investment, the risk appetite of an individual and the liquidity offered by the fund prior investing in any particular fund. Here we have briefly described that how you can use a different Kind of Mutual Fund Schemes to achieve your financial goal.
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Diversified Equity Funds
It is wise to make your retirement plan at early stage of life. Investing in mutual fund is a great idea of building your nest egg. If you fall between the age group of 20-30 year and your retirement is 25 to 30 years away, then investing in equity funds can be very beneficial. Although, equity funds involve high risk, it also has the potential to provide high return of investment to the investors. If we talk about long term investment then equity funds tend to beat all the other asset classes in market performance. Equity funds can really offer high return on investments as compared to the any other mutual fund, if chosen wisely.
Thematic Fund
If you have a risk taking ability, consider investing in thematic fund. These funds provide a focused exposure to the investors to a particular sector or theme thus it involves high risk as compared to the diversified equity fund. Thematic fund are most suitable for aggressive investors and can provide profit over a mid-term period.
Asset allocation funds
Making an investment to achieve the future financial goal is a time to time affair. As the financial circumstances on an individual changes with time, so thus the risk taking ability also changes. Thus, it is very important to rebalance the investment portfolio accordingly. Investing in asset allocation is one of the best ways to rebalance the investment portfolio. Asset allocation fund progressively reduces the exposure to volatile asset and shifts the investment to more stable option.
Asset allocation fund is also known as life stage fund in which initially the investment is done on equity and is gradually shifted to cash deposit and bond fund as the age of the investor increases.
Systematic investment plans
According to the market experts systematic investment plan is the best way to invest in mutual fund is through SIP. In SIP a fixed sum amount is invested in mutual fund every month on a predetermined date. SIP is a best way of making disciplined investment, however one should keep in mind that SIP performs best if you continuously invest in market despite of market violation.
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Balanced funds
If you want to save money for your child’s education or for marriage then it is important to make a balance between your investments and saving. Balance mutual fund equally divides the corpus between debt and equities. Balance fund provides steady return to the investors along with lower risk.
Investing in mutual fund can be very beneficial if you do a bit of market research and choose the funds wisely. One choose from the wide range of mutual fund option available in the market like LIC mutual Fund, HDFC Mutual Fund, Reliance Mutual Fund, etc.