Hello Readers!
Individuals when they plan to invest in their big goals or long-term goals are advised to invest in Equity mutual funds, and at the same time, they are suggested to start their investment as early as possible and take it as long as their goals require.
An early start gives you the advantage of being invested for a longer period to take advantage of compounding returns. Well starting early to invest is prominently suggested for Equity Mutual Funds, but question is, what is the right time to invest in Debt Mutual funds? Do we need an early start or are they more suited for post-retirement regular income needs?
Let us know in detail.
Start With A Good First Investment!
Experts say, the earlier you start to invest the more benefits you will receive from your investment, irrespective of where you are investing, Equity Funds, or Debt Funds. There is nothing like the right time or right age to invest in mutual funds, in fact, a child can also invest in mutual funds with the help of their parents or guardian.
Both Equity Mutual Funds and Debt Mutual Funds are a market-linked investment and thus associated with volatilities of the market, however both work differently from each other. In equity mutual funds, early start helps you stay invested for the long-term that directly and positively impact the returns from your investments. In the case of debt funds, the compounding returns over the long term is usually not the investment concern based on which they are managed.
Thus, it is advised if you are a novice to the investment sector then don’t find the right time to invest, start your investment with a simple debt fund, and experience market-linked investing.
Don’t Find The Right Time, Link Your Investment To Your Goals And Start!
Instead of finding the right age or right time to invest, an investor must link their goals to their investment and start investing. Debt funds will help you park money for short periods of time, say from a month to a year or two years. So basically, if your investment objective is low risk with stable returns and an instant withdrawal option without any penalty, then you must look towards investing in Debt Funds.
Decide Your Short-Term Financial Goals And Pick The Appropriate Debt Fund To Match It!
Debt funds are investors for their other investment objectives also. Investors switch to low risky and debt funds from Equity funds when they are near to reach their goals. They also invest in debt funds for post-retirement regular income given the relatively lower volatility as compared to equity funds.
Financial planners or advisors often enquire about your age, financial status, and other necessary things so that they can figure out what is the most efficient way to start investing. However, regarding the right time to invest, most have them similar one-line answer “the most efficient way to invest is to just start it now”.
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 of future returns).