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Secrets only successful mutual fund investors know

It is crucial that you know exactly what you are doing or choose the right people to show you mutual funds tips and tricks. Here are a few mutual fund investing tips from the most successful mutual funds investors.

1.      Add a little more

For a beginner, adding a little more investment could mean a little more risk; it also means that your gains may increase. Since the percentage return on your investment is likely to be the same for Rs. 20,000 and Rs. 25,000, the accumulated difference is quite significant over time.

2.      Timing is tough, be persistent

Peter Lynch, a popular American investor, suggests that you need to have the stomach to handle the risk and bad news while waiting it out. Patience is key when dealing with mutual funds. It is to be expected that there will be fluctuations. The key is in hanging on and playing it smart.

3.      History may not repeat itself

Don’t select a fund based just on its performance in the past. Get great fund managers to share their insights.

4.      An eye on expense ratios

It is essential to know that your expense ratio isn’t going to put you in a pickle. One of the mutual funds tips for beginners from John Bogle is to keep your costs low. Having said that, mutual funds with higher expense ratios may give you better returns.

5.      A piggy bank doesn’t expand

Make your money work for you. Sitting around doesn’t allow the fund to grow. John Templeton suggests that you should find the best bargains available and invest internationally.

6.      Saving taxes is smart

Paying fewer taxes means you have more money to spend. Investing in ELSS mutual funds is a great way of reducing your tax burden.

7.      Choose the right type for you

There are various kinds of mutual funds schemes, depending on your goals. You could even choose liquid funds if you want to focus on the short term.

8.      Net Asset Value?

NAV alone does not determine your potential returns. Look at all the other factors too. Just because a scheme has a lower-priced NAV doesn’t mean that you will make more money.

.      Do your research

Another tip from Peter Lynch is to do adequate research. Having a dedicated professional team with all their attention on mutual funds and how the markets work, that’s the way to go.

Explore more options with the help of a financial advisor whose transparent, professional approach to mutual funds investment would help you to reach your goals.

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