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People when invest, be it in mutual funds, or the stock market, or any other instrument, take their investment as an asset. The asset that they would be selling at a higher price in the future and gain good returns!
The gains obtained will typically be used to meet the needs of future income or achieve varied financial goals. From all this, we can take that investments are purposely meant to gain returns for future goals!
Well, investing in different financial instruments help gain returns and create wealth. However, it can’t be overlooked that even the best investments turn bad sometimes.
Being an investor, one must do regular monitoring of their investment portfolio, through this one can save investments that turn out bad. Well, one more thing investors must watch out for, their INVESTMENT ACTIONS!
Besides investment choice making and monitoring, investment actions can also impact wealth, in fact, they can deteriorate your wealth creation plan. Thus, do watch them out!
To help you out, below we have discussed some investment actions that can prove detrimental to your wealth creation plan!
Do You Switch Between Funds Frequently?
Investors often switch between funds, be it equity funds or debt funds, based on funds' short-term performances, which is actually not recommended especially with equity category mutual funds.
Because fund managers of equity funds actively pick up stocks with a time horizon of three or more years, so that these stocks get a good time to grow and generate returns for investors. But when you switch between funds more often it hardly gets time to grow and generate wealth for you.
Added to that if you end up selling a fund in haste, you may lose out on the chance to witness the actual growth of the fund. Then what to do?
Typically, do not exit from funds so shortly, or prematurely. Stay put and exit a fund only if it consistently does badly.
Take Actions On Noise And Not News!
Many investors act upon the market news they hear rather than analyzing the complete news, and ultimately end up taking a wrong decision that impacts their wealth creation plan!
For example, suppose your friend who was investing in an equity mutual fund, redeemed his investment because the stocks in his fund were not performing well. You are also investing in an equity mutual fund but another one.
What would you now, redeem, or stay invested in your equity funds? If you ask me, I will say analyze the fund you are invested in and the stocks it holds. Check out the fundamental of the stocks your fund hold, if they have been altered and is not aligned with your goals, you may redeem your investments. Else ignore the news!
Investing In The Market Trend!
In general, when people plan to invest they look for mutual funds schemes that are trending and creating a lot of buzz in the market. If we talk about the current hot funds in the market, they are international equity mutual funds.
Well, as a category this fund has performed better in the last two or three years and is looking towards the same. However, these funds are taken a good option to add diversification to your portfolio, but you cannot depend on all your needs on this fund!
Picking up random funds based on recent performance can prove disastrous because it is not for sure that fund that buzz today will be hot news tomorrow also. It volatilizes and will. So pick up funds as per your goals and investment objective.
Do It Yourself!
If you are an experienced investor taking a toll on your investments is easy for you, however, there is no issue if you find it difficult and want to get an expert's assistance! Do not hesitate, just consult a financial expert for help!
If you are a novice investor and analyzing and researching about funds is taking a lot of time, even after that you are not satisfied with the results, it is better to leave it to experts.
A good financial wealth advisor – while charging you for his services –efficiently plans and invests your savings into various investments according to your financial needs and goals.
Sum It Up!
Being an investor you need to understand, your investment actions have a great impact on your wealth creation plan, thus you need to be right with whatever decision you make regarding your investments.
Do not take any decision in haste, rather wait, analyze, research, and when need, take help from an expert, then only come to any conclusion! Ignore noise and short-term-isms to achieve financial goals, with certainty.
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).