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Equity Mutual Funds and Debt Mutual Funds are two types of mutual fund schemes, designed to help achieve investors their different financial goals. Equity funds are long-term investments that generate high returns in long term and are much suitable for financial goals like retirement, child educations, and others.
While debt mutual funds are short-term investments, that are much suitable for goals nearby, like buying a car or planning a vacation, and others. Well, as an investor, an individual must know that having a debt fund in their portfolio, along with equity mutual funds, helps improve the growth of equity funds in long term!
Now you must be curious to know that how a debt mutual fund scheme in a portfolio helps equity funds grow.
Let us understand, how you should carry your equity investments, and how your debt funds in your portfolio help your Equity Investments to grow.
Don’t Let Your Emotions Overrule……….
It is always explained to equity investors before they start investing, “Your Equity investments need time to grow, and to cater the effects of periodic volatility of the market.”
To earn good returns from equity investment, a minimum of 7 years of continued investment must be there, but this is not easy to implement for everyone.
It’s difficult to digest the ups and downs of the market, without reacting adversely, especially when your investments are beginning to approach levels, significant for your goal amounts. At this time, investors get afraid of losing their hard-earned money just because of the jittery market.
And to save his money, he decides to redeem his equity investments, in short-tenure, and either receive a low benefit or ends with a loss.
Basically, as an investor, you need to understand the importance of staying invested for the long run, when you invest in Equity Investments, and also need to understand, how your long investment tenure, average out the fluctuation of the market, during your investment period and gives a cheerful benefit on your investment.
Make Sure You Stay Invested, For The Long-Term……..
Well, this is the most important thing, you have to make sure that you stay invested for a long period in your Equity Mutual fund. This can be done in two ways, first, don’t get refrained when the market fluctuates, and secondly find a way that makes you sure, you don’t need the money you invest in equity, immediately. This can be done, by putting some money in an investment structure, that doesn’t fluctuate or is not exposed to any major losses.
Make Sure Your Portfolio Has Debt Funds Too………….
For your short-term goals, or immediate requirement of money, you should invest a part of your fund in different types of Debt funds, this helps you in several ways:
- It gives good diversification to your portfolio.
- It can work as a valuable tool for protecting your wealth from Equity Investments.
Investing in low volatility fixed income investments such as liquid funds and short duration debt funds will ensure that you never you that you never redeem your equity investments unless you have reached your long-term goal amount. Your Liquid fund investment also works as emergency funds, for your inevitable money requirement.
OverView…….
As of now, you would have understood, how having Debt Funds in your mutual fund portfolio, helps your Equity Investments to grow and protects your wealth creation from Equity Investments.
So, if you are planning to invest in long-term Equity Mutual funds, don’t forget to add a Debt fund in your portfolio, or if you are already an Equity investor and don’t have a debt fund in your portfolio, then today only, invest in debt fund and protect your wealth creation from Equity Investments.
You can contact your fund manager or can visit Ashutosh Securities Pvt. Ltd. for any further assistance in mutual fund investment. Keep reading our article and stay updated with the latest news about Mutual Funds!
For any kind of query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).