How to achieve your financial goals with mutual funds?

Mutual funds are among the most convenient and popular investment vehicles for income-focused investors. The mutual fund investor count in the country is estimated to have grown by over 1.3 crores in 2018, as per the Association of Mutual Funds in India (AMFI). The penetration of mutual funds is expected to further ascend with several favorable measures from the regulator, as assessed by the Securities and Exchange Board of India (SEBI).

The major advantage of mutual funds is that it allows you to invest in a diversified portfolio of investments. Since there are a plethora of options available in mutual funds, it is essential to choose the best funds that suit your financial goals. Here are some of the key considerations that you should be aware of to maximize your returns and reach your financial goals through mutual funds. Go with multiple asset classes Building a diversified portfolio is the key to maximizing your returns and decreasing the risks involved in mutual fund investments. And the portfolio should resonate with your specific financial goals.

The fund selection and asset allocation should be based on your investment potential and risk appetite. You should be aware that no mutual funds are created equal in terms of risk or returns. Hence, it makes sense to have a financial expert, who knows all about mutual funds by your side in your investment journey if you are a beginner in the field. Be systematic in investments In mutual funds, you can either be a lump sum investor or choose to invest systematically.

Systematic Investment Plans (SIP) refers to the process in which the investor puts money in a regular and disciplined way. You receive the benefits of compounding as well as rupee cost averaging in SIPs. One can invest as low as Rs 500 in SIPs which makes it the most attractive option in mutual funds. Based on your unique financial requirements, you can choose the right investment route and maximize your returns in the future.

Make sure you use an inflation calculator to anticipate future values so that you can choose plans accordingly now. Check your returns periodically Investing in mutual funds is not a one-time activity. To make sure you are on the right track on optimizing the returns, it is necessary to periodically analyze and measure the existing strategy. If one or more of your existing investments are not performing as expected, you can consider other options. However, it is not ideal to jump into investment decisions, as temporary issues may get sorted in the long run. The bottom line No market is certain and no single mutual fund is perfect for any investor.

In mutual funds, the investor has a number of choices and various decisions to make – right from allocating funds, to choosing between reinvestment of mutual fund dividend or selecting a growth option. With the help of a fund manager, you can analyze various options and choose funds that suit your specific financial requirements.

A mutual fund is perfect for any investor who wants to achieve their financial goals. Hence, it makes sense to have a financial expert, who knows all about mutual funds by your side in your investment journey if you are a beginner in the field.

Here's a little bit about myself. I've done a Masters in Economics and teach the subject to high school students. I am 32 years old and married to an investment advisor. A Dhoni fan who loves to play football! I am a sports enthusiast and a firm beli