“Mutual Fund investments are subject to market risks, read the offer document carefully before investing,” all of us have heard this audio-textual warning message in each mutual fund’s TV ads since childhood.
Well, most of you know the ins-and-outs of mutual funds, and that they’re risky, and subjected to change with the changing market. Those who know a little about finance also know that they’re not a fixed value money instrument.
But, there’s a big but here, that says that mutual funds many times end up providing more returns. Unlike the traditional FDs so much loved by India, mutual funds promise much more returns than an FD. Thus, many people are ready to take the risk.
Here are a few things you should check before investing in a mutual fund.
- Know your Objective: Before you approach an AMC for your investment, understand your goal clearly. Since that goal will define the time in which you need your returns and how much risk you should be taking. Then you can easily choose an AMC and their funds.
- Ratings: Check for CRISIL ratings that a particular fund received. Even though not the only way to be sure, CRISIL rating can be a good reference point for you to be sure. For those who don’t know, CRISIL is an independent agency that runs its regular research on funds and investment.
- Know your Fund Manager: Try to know the fund manager behind your funds. A fund manager with a not-so-good track record can be risky.
- The fund’s track record: Be in touch with individuals who invest regularly, and discuss with them funds that have had good returns and less risk in the past.
I hope these help you on your investment journey. All the best..!