Over the time, mutual funds have gained much popularity as an investment option among young Indians. However, if you are new to the invesment scenario and are investing for the first time, then you are bound to be confused as to where you should put in your hard earned money.
On this account, investing a lumpsum amount is a big task for many investors especially when the market is at an all-time high.
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Risk-Return calls The first thing investors need to do is to find out how much risk they are willing to take. In case if the investor is uncomfortable in taking risks, then he/she should stick to safer investments like bank fixed deposits and debt mutual funds.
Now, for investors who are willing to take risks, they can consider investing in the stock market. However, one has to take several things into consideration before investing in the stock market.
Risky schemes In case you have a short investment horizon, the investor should avoid investing in pure equity schemes, especially risky ones like the mid-cap schemes, sector schemes etc.
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Balanced Mutual funds Balanced mutual funds schemes are those schemes which offer investment in both equity and debt securities. These funds can provide regular income for the investors due to their debt componenent through which the investors can earn interest while the equity portion have the potential for capital appreciation maintaining a balance between risk and returns.
Risks Investing in the stock market comes with risks. However, you have to choose a proper investment strategy so that the risks are adjusted with the regular returns that you are getting. Investing in equity is risky, especially in the short term.
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Investment Horizon The investors should be extremely careful while investing for a relatively short period. The risk of short-term losses is high when the market is hovering near historical peaks. Investors should consider an investment horizon of at least five years in the below mentioned schemes
Recommendations Here are some funds which are recommended for investors. Thses are: Edelweiss Balanced Advantage Fund, ICICI Prudential Balanced Advantage Fund, Aditya Birla Sun Life Balanced Advantage Fund, Aditya Birla Sun Life Balanced Advantage Fund.
