Skip to main content

Be Rational and Increase your Mutual Fund Returns

 Be rational and increase your Mutual Fund returns

Many a times emotions take a ride over rationality in life, but this should not be while investing in mutual funds. Any retail investor would feel happy while they see growth in their investments but anxious if the prices decline and start selling their units fully or partially. Instead of getting emotional smart investors would take logical decisions and they advantage of lower prices and add more funds to their portfolio and increase their returns.

The decisions made based on the information should be avoided rather it needs to be on the basis of data your mutual fund distributor would be able to help you with facts and analysis. Investments needs to be viewed on long term basis while investing in stock market.



Ways to apply rational approach

Avoid investing based on speculation:

An in-depth analysis and research on the fundamentals need to be done on the fund, management, industry trends and the competitive landscape before investing in mutual fund.

Analyse the fundamentals:

Before investing in a mutual fund, conducting thorough research and analysis of its fund, management, industry trends, and the competitive landscape is essential. This helps to make an informed decision based on facts and not just speculation.

Plan review and Prosper:

Before investing prepare an investment plan that are aligned with financial goals that comprises portfolio diversification, realistic expectations, monitoring and reviewing and re balancing.

Avoid herd mentality:

Do your own research and analysis and make decisions, avoid getting carried away by opinions of the masses that has no basis of facts and also from motivated propaganda. Financial research and analysis are complex in nature and it requires a good amount of knowledge, expertise and time consuming.

Manage risk:

Diversifying portfolio across different sectors, and asset classes. They should also have a risk management plan to mitigate the risk. By applying a rational approach to long-term investing in mutual funds, investors can make informed decisions based on facts and analysis, avoid emotional decision-making, and position themselves for long-term success.

Comments

Post a Comment

Popular posts from this blog

India’s Budget 2025: New Tax Slabs, Rebates & Impact on Your Finances

    The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman on February 1, 2025, has introduced significant reforms aimed at stimulating economic growth, enhancing consumer spending, and promoting sustainable development across various sectors. This article delves into detailed analysis of personal Income tax, the key highlights of the budget and analyzes its potential impact on India's economy and its citizens. Income Tax Reforms: A Boon for the Middle Class One of the most notable announcements in the Union Budget 2025 is the substantial relief provided to middle-class taxpayers. The government has raised the income tax exemption limit from ₹7 lakh to ₹12 lakh under the new tax regime. This means that individuals earning up to ₹12 lakh annually will not be liable to pay any income tax. Additionally, the budget proposes revised tax rates for higher income brackets, further reducing the tax burden on the middle class. These measures are expected to increase...
Post a Comment
Read more

Emergency Fund: The Safety Net You Can't Ignore

In today’s unpredictable world, financial stability isn’t just about accumulating wealth; it’s about preparing for the unexpected. Emergencies, whether personal, health-related, or natural, can hit without warning. Without the right financial cushion, these unforeseen events can disrupt your life and derail your financial goals. This is where an emergency fund comes into play, offering a crucial safety net to safeguard your financial future. But what exactly is an emergency fund, why is it so important in financial planning, and how can you effectively build one? In this article, we will explore these aspects in detail, highlighting the significance of having an emergency fund and how it plays a key role in your financial security. What is an Emergency Fund? An emergency fund is a designated pool of money set aside for unexpected expenses or emergencies. These funds are not meant for regular expenses or planned purchases; rather, they are reserved for financial emergencies ...
Post a Comment
Read more

Prudent Financial Planning foster's your Wealth Creation plans

  “Plan to Prosper” Winner’s – Make plans and Do, Loser’s do quite opposite,this is much applicable in Wealth Creation also. The high-rise buildings are the new norms in today’s urban world and spacious ones in rural. One might admire looking at the tall buildings, the design and art it carries but most fail to remember that a strong foundation is the basis of this glory. Visualising a Dream home, Dream holiday destination, Dream car, Quality Child’s education and Financial Freedom are quite common in most Indian minds. There are two choices to make these dreams come true either with Your money or with the Banker’s money if your choice is former then chances of achieving your financial goals are high the later might put into financial mess and hard to come out of it. It’s been always said that Indian families do a pretty good savings (Experts suggest at least 20% of your income should go into savings and investments) but in FY-22 the savings stood at 7.3% a 30 year low becau...
7 comments
Read more