Mutual Fund Investment for the First Time Investor

By | February 4, 2023

For a beginner, investing in mutual funds can seem a difficult task. Understanding the meaning of mutual funds and how mutual funds work is the first step in the investment journey…

For a beginner, investing in mutual funds can seem a difficult task. Understanding the meaning of mutual funds and how mutual funds work is the first step in the investment journey.

A mutual fund means a fund established in the form of a trust to raise monies through the sale of units to the public or a section of the pubic under one or more schemes for investing in securities, money market instruments, gold or gold related instruments, real estate assets and such other assets

Depending on the schemes objective, the money collected from investors is invested in various categories such as stocks, gold, bonds and other securities. A fund manager whose main aim is to follow scheme objective and try to generate alpha on the fund’s investments manages each fund.

If you are a first time investor you should consider your financial goals, your investor profile viz, are you looking for short term investments or are you aiming at building your wealth over long term? You should also look towards diversifying your portfolio by investing in different mutual funds.

Beginners can begin their investing via systematic investment plans (SIP) especially if they are investing in equity instruments for the first time. A lump sum investment can be risky if the stock market is at its peak.

SIP allows you to spread your mutual fund investments over time and invest across market levels.

A mutual fund calculator is a financial mechanism that enables investors to calculate the estimated returns on their mutual fund investments.

A mutual fund calculator guides you in your future planning based on estimated returns.

An SIP calculator is a financial device that enables investors to calculate the expected returns on their SIP investments. With the help of this tool, you can calculate how much of mutual fund investment is needed to achieve the target corpus.

Investments in mutual funds can be made online or offline. However, bear in mind that you should be KYC compliant to invest in a mutual fund. This means, you need a PAN card and valid address proof.

One can invest in mutual funds through RIA or directly with the asset management company (AMC) in the direct plan. You must complete your KYC formalities online. You will also have to complete the IPV (In-Person Verification) by SEBI-approved agencies.

Mutual fund investments can be made through a mutual fund distributor by opting for a regular plan. The mutual fund house pays a commission to the mutual fund distributor or the intermediary.

You can also invest in direct plans of mutual funds online through the website of a fund house. You need to complete your KYC (Know Your Customer) compliance and then invest in the mutual fund scheme of your choice.

Mutual funds are one of the effortless way of investments. It helps to potentially grow your corpus in the long term. For this, plan your goals, through mutual fund comparison select the appropriate funds and start investing.

Disclaimer: The views expressed here in this Article / Video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The Article / Video has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of the Article / Video should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. None of the Quantum Advisors, Quantum AMC, Quantum Trustee or Quantum Mutual Fund, their Affiliates or Representative shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary losses or damages including lost profits arising in any way on account of any action taken basis the data / information / views provided in the Article / video.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.