Top Mutual Funds investment mistakes to avoid
- Aimless Investing: Defining a SMART goal before investing will not only help you in assessing your risk appetite, but also in selecting the best funds for your needs.
- Making rash decisions: Short term outlook must be avoided and the investor must stick to his goals even during bullish/bearish markets.
- Using only NAV as an indicator of fund performance: Never buy a fund solely on the basis of its NAV. Its performance is also affected by factors like management decisions, portfolio holdings, etc.
- Ignorance of Taxation rules: This leads to lowering of the return earned by investors as at times they end up paying more taxes.
- Lack of review: Not reviewing the fund’s performance in a timely manner can lead to losses for investors.
- Investing in too many funds: This may lead to inclusion of many underperforming funds in your portfolio, reducing the overall return generated.