Do you want to buy a house in next six or seven years? Are you planning to save for your retirement that is due in twenty years? Are you eyeing a foreign tour in next two years? Well, all these goals are different from each other but all of them have one common feature. All of them require a considerable amount of funds for fulfillment. Well, it has been seen that when people have money, they spend it mindlessly or invest it in a thoughtless manner, without paying attention to their future needs. They do not care which type of investment is best for them. They are not aware that the same money, if spent wisely and invested with careful planning, can help them achieve all their financial goals on time and without any difficulty.
Mutual funds are investor friendly
Mutual funds are a popular investment option that are being hailed as rewarding as well as growth-oriented for investors. They offer better returns than traditional investment tools. They give so much to the people and have so much variety that anyone, belonging to any income bracket, can invest in them and look forward to good returns. Mutual fund schemes have a lot of diversity. There are equity, hybrid and debt funds to choose from and one can invest in different funds for different time periods. In other words, there is a lot of flexibility for the investor and they can select a fund which suits their risk appetite and also caters to their financial goals.
Plan before investment
Mutual funds, undoubtedly, are great for investment but before putting the money in any scheme, it makes sense to plan things out. You should chart out your personal financial goals as in very short term, short term, medium and long terms goals. Once you decide on the goals, you can calculate the future monetary value of the goals as well as the time period after which you will need the funds to fulfill these goals. When you have figured out the amount and time, you can select the right mutual fund scheme and achieve all your goals.
Invest as per time period
For very short term goals that are to be fulfilled in three months to a year, one should try to build an emergency fund. The investment should be such that it can be liquidated with ease at any time and in this regard, liquid and ultra short terms fund turn out to be best bet. They offer capital safety and the return is also higher than bank savings account. For short term goals, i.e. goals that have to be fulfilled within two to three years like vacation, buying a car and the like debt fund and arbitrage fund are the best option. Investment in debt and treasury bills, government securities, corporate bonds makes for secure investment. Arbitrage funds too offer safety as their risk profile is similar to debt funds but are considered to be equity funds from taxation point of view.
For medium term goals that are to be fulfilled within four to eight years such as buying a house or starting your own business, balanced or hybrid funds are the best option. These funds invest in the ratio of 60:40 in equity and debt funds. Therefore, for medium term goals, they offer the right type of risk profile. For long term goals i.e. goals to be fulfilled in eight or more than eight years like marriage of children, their higher education, retirement, etc. equity and equity oriented funds or diversified funds are suitable option. They give returns ranging above 12% and after ten years, the risk turns negligible. One can also get tax benefits under these schemes.
If invested with due care and planning, mutual funds can turn out to be an asset for an individual. They can redeem the investment at an appropriate time and see their goals turning into reality without any ado. So, what are you waiting for? Visit Findvise or download the app today to figure out your financial goals and then make a suitable investment in a fitting mutual fund scheme. You will be surprised with the gains coming your way.
Findvise is a professionally managed robo advisory platform that will analyze your aspirations and finances in the most scientific way and help you to allocate your savings in the most gainful manner.