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MUTUAL FUND GUIDE
1. Investing in Equity SIPs for a limited time
When investing in equities, it is recommended that you stay invested for the long term. To achieve short-term goals, you may want to invest in schemes that provide stability and high liquidity, such as liquid funds, or debt funds with a lower / shorter duration. If you want to make good wealth then you have to invest in equities for a long time. Warren Buffett, Rakesh Jhunjhunwala, Madhu Kela, Ramesh Damani have all been big investors and they have made so much wealth by staying in equities for a long time. It is not possible that you can make good wealth by investing for 1-2 years. At least you should invest for 10-25 years then all your financial goals will be fulfilled. Click on Nestle's link and see its chart These are monthly charts. Journeys from 2010 to 2021 are in this chart. That means 11 years. In 2010 the price of Nestle was around 2500-2600 and now in 2021 the price of 19000 is running. The price of Nestle has gone up almost 10 times since 2010. This is what I want to tell you, the longer you stay invested, the more profit you will get. nestle
2. Having a large sip amount
There is no maximum or minimum amount to start a SIP; you can invest as much as you want. However, keep in mind that you must stick to the SIP amount throughout the investment tenure. People think that SIP of large amount gives more profit, but it is not so because profit is not made by the amount of SIP but by choosing the best stocks and by doing SIP continuously. Many times, people SIP more money than they need and then they are not able to continue the SIP for a long time. In life, a person needs money at every stage in every field. After taking out all the expenses and making your necessary savings, sip the amount of money that is left with you. You will be able to continue the SIP of this amount for a long time and you will not be burdened.
3. SIP cancellation during market volatility
Investing in equity funds works best when you have a long-term plan and a specific amount in mind. However, canceling the SIP during a market downturn can have a negative impact on your investments.There are ups and downs in the market, it does not mean that you should cancel your SIP out of fear. Do not do this, but double your SIP amount when the market falls, this reduces your cost. Traders are impacted by market volatility not on investors because market is not a 1 day or 2 day game for investors, they have to play long innings like a test match.
4. Reviewing SIP performance at short intervals
Reviewing and rebalancing your investment portfolio should be treated as a health check. A very short gap between reviewing and rebalancing your portfolio will not yield the desired results. Keeping checking your nav in short time periods is not good for an investor's mindset. By repeatedly checking the price of your nav, its price will not go up. For 1 month or 2 months is fine but watching 10 times a day or watching in a gap of 1-2 days then the volatility of the market definitely dominates you. From the day you start your sip, keep this thing in your mind that you have to continue the sip for a long time and do not have to check the nav again and again.
5. Choosing the incorrect scheme for the incorrect goal
In their pursuit of extremely high returns, some investors may choose schemes that do not fit their risk profile. As a result, they are constantly concerned about market and portfolio volatility. Before starting SIP, set your financial goal, for which goal you are doing SIP. It should not happen that you choose the wrong scheme for your goals. For example, if you want to meet your short-term needs, then you should go towards liquid funds in which you can easily withdraw your money. Such funds are not of high return because the purpose of these funds is to secure your money. Returns are available in this too but less returns are available than other funds. Similarly, if you want to raise funds for your house or car, then you should choose funds with high returns.Choose the fund according to your financial goal.
6. Not taking expert advice while investing
Consult with an advisor who can assist you in focusing on long-term investment strategies that provide good returns. If you have knowledge of financial market then it is very good but if you do not have knowledge of market at all and you want to start investing then you should take help of a professional investment advisor. It is your hard-earned money, and you should invest it after taking the advice of an expert. Those who are experts have complete knowledge of the market, when where and how much money to invest. He also gives advice on when to book your profit and exit from the funds.
on this blue link, I have also written an article on how you can choose a good investment advisor. Must read this article also it will be useful for you.
