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Tips on Investing in Mutual Funds
These are several ways to maximize your profit from investing in mutual funds:
- Know Your Needs and Goals
Investment is like a race; you should visualize the finish line in order to develop winning strategies. As for investment, you should first know the needs or goals you wish to fulfill, for instance, preparing a down payment to purchase a dream car in two years, preparing tuition for your child 10 years down the road or earning monthly income after retiring in 15 years.
- Broaden Your Horizons
Broaden your horizons with sufficient information on investing in Mutual Funds and investment strategies for Mutual Funds. For example, learning the Dollar Cost Averaging is one such strategy for investing in Mutual Funds.
- Be Cautious
Invest in what you know (Warren Buffet).
Thoroughly consider the benefits and risks of investment in a Mutual Fund product before investing to make the best decision. Begin investing with a Mutual Fund product that you understand and suit your needs.
- Keep Up-to-Date with Global Trends
Broaden your knowledge of issues and trends in the world that might have an impact – direct or indirect – on your investment.
- Make Long-Term Investments
Historically, data shows that long-term investment would bring the most optimum outcome. For instance, the Jakarta Composite Index (JCI) in December 2012 was 424.95, and grew to 4,316.69 in December 2002. Over the last 10 years, JCI grew 916%, or 91.6% per annum. However, the index once saw a significant decrease in 2008, plummeting by 50.6%. The take is that no matter what condition the market is in, we need to be optimistic. Remember your aim and believe in your investment manager. Even in the most difficult circumstances, trust that investment is your vehicle towards a better future.
- Be Disciplined
In carrying out several investment strategies to guarantee an optimal yield, you need to be disciplined. Investment strategies include regular investments or routing portfolio rebalancing.