Mutual fund is one the popular choice of investment for many investors as it offers high returns, options to invest in different asset classes, low risk as compared to direct equity, low investment amount and many more.

Though there are few factors which investors should know while investing. Neglecting these small things can lead to wrong decisions or regrets.

1.Understand product before investing

It’s one the most basic thing. Investors should check the objective of scheme, where their money is going to get invested, scheme performance, history, etc.

2. Check and compare fund with peers

Check fund performance, expanse ratio, AUM and compare it with its peers from same category. This is simple task and details are available easily on websites like moneycontrol or value reaserch online.

3. Do not go blindly with suggestions

Ask questions to understand why your advisor or distributor suggesting specific funds. A good advisor wouldn’t mind it to explain.

4. SIP is not a solution for every goal

SIP is a route of investment and not compulsorily suitable for every goal, duration or type of scheme. In addition, SIP is a mode of investing in mutual funds and not any mutual fund scheme.

5. ELSS is not an investment only for 3 years

ELSS funds are multi cap funds and carry risk. Therefore, it is always recommended to stay invested for long term after lock in is over. Also, avoid investing in too many ELSS funds.

6. SIP and ELSS

When one invest in ELSS through SIP mode, their each installment gets locked for 3 years. Keep this in mind.

7. Growth or Dividend option

Choose option wisely. Growth is always recommended. Avoid dividend option if you do not need any regular cash flow or additional income source.

8. Mutual funds are always not about equity

Mutual fund investments are not always about equity schemes. There are many options like debt schemes, liquid funds, gold etc.

9. Mutual funds are not for trading

Avoid switching or redeeming mutual funds to book profit and reinvest sum in other funds for short term. Mutual funds are not stocks to trade.

10. Invest with a goal and for long term

Attach a goal to your investment in mutual fund. If you are investing in equity funds, invest for long term. Every investment needs time to grow.

11. Low NAV does not mean more profit

If you are investing in a scheme just because its value is low, does not mean you are buying it cheap or going to earn more profit as compared to high NAV scheme.

Happy Investing!