Their parents and other relatives continue to cater to the youth to save more. But due to high expenses, saving for tomorrow is not easy. However, this is the best age to plan for financial security and hence one should invest more thoughtfully. Talk about investment, if you are a beginner, then your mutual fund is the best option. They give you opportunities for different portfolios, stable returns, liquidity and low prices.
Whether they want to save for short-term or long-term goals, mutual funds can fulfill this objective. With the ease of investment, a person can start investing in a very small amount. However, what bothers the youth is how mutual funds can get the best returns from investment. There are some investment tips and rules for this. Young investors can follow these five tips to increase returns.
Use index funds
There are similar ways to recover in a big fall in the market. Some investment options are safe and with it there is a chance of better returns in future. Index funds are one of the few ways to beat the bouquet situation in the market. Apart from this, low market risk and low price make it a better choice for better long-term performance.
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Continue investing even if there is a difficult situation in the market
Keep your Systematic Investment Plans (SIPs) and do not worry about the operational part of mutual funds, as long as you do not have to make any new investments, switches or profile or account changes. Mutual funds are one of the best options irrespective of the market situation.
Avoid the pressure to redeem
There have been many declines in the market before this but there is always recovery. Therefore, it is sufficient to remain calm in a hurry and do not redeem your investment. The ups and downs are a part of the investor’s journey and you should avoid doing anything in haste.
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Review your investment portfolio periodically and change your portfolio according to the changes in the market. It is also important to change the financial goals according to your risk capacity, age and financial goals.
Including multiple asset classes in a portfolio and returns better than many asset classes. While it is true that fund selection and asset allocation should be based on investment, financial goals and risk appetite, it is also important to avoid investing in too many funds as it is not possible to track performance.
(By Jashan Arora, Director, Master Capital Services)