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Beginners Guide to Mutual Fund Investment

Mutual fund investment is a highly beneficial investment option for people who want their money to grow. These are well-diversified and provide tax benefits of financial management. They are the best investment vehicle for beginners’ guide to mutual fund investment where you just have to invest and the fund manager will take care of other things like picking up potentially profitable stocks. 

Although mutual fund investment is ideal for beginners due to the simple procedure, still you need to learn the mutual fund guide for beginners to gain enough knowledge about the investment. For people who find mutual fund investment complex and confusing, they should also understand the mutual fund investment guide beginners to clear their doubts.

Mutual funds are the investment programs that shareholders fund for trading in diverse stocks and other investment instruments and the professionals manage the process. There are different types of mutual funds available for investment, such as:

  • Stock funds
  • Bond funds
  • Index funds
  • Balanced funds
  • Money market funds
  • Income funds
  • International funds
  • Specialty funds
  • Exchange-traded funds

All the above-listed mutual funds offer different benefits to investors. Now, let’s jump to the Beginner’s guide to mutual funds will help you to understand how to invest in mutual funds as a beginner.

Mutual Funds Investment Guide Beginners 

If you are a beginner and searching for a mutual fund guide for beginners, here, we are providing you with a detailed guide.

1. Getting Ready

Before investing, you need to get ready with the documents and other things like a bank account with KYC done to verify the identity. KYC procedure requires a passport-size photo and an Adhaar card. The process is free and can be done online or offline. The offline process is done by filling out a form on the registrar’s website. It takes less than 5 minutes and you just need to enter your mobile number linked to your Adhaar card.

The IPV (In-person verification is done by video call where they will ask you to show original address proof and ID. The beginner’s guide to mutual funds will help you to get ready for investment.

2. Choosing the Right Fund

Although mutual funds are easy investment options choosing the right fund can be troublesome. There are more than 2000 schemes available for different types of mutual funds and you have to choose the one that you find the best. It can be overwhelming but not impossible.

The beginner’s guide to mutual funds explains to you all the funds and you can select them easily. Firstly select one from debt or equity. Debt funds are steadier but offer low returns whereas equity funds fluctuate a lot but offer high returns. Then, with the help of a mutual fund guide for beginners, you have to select a mutual fund. For this, select among the 4-5 star rated funds and diversity your amount into 2-3 funds.

3. Buying the Funds

Once you have made up your mind, now mutual funds investment guide beginners will tell you about buying funds. For buying the funds, you can do the process directly from the fund house or hire an intermediary. If you have enough knowledge about investing in mutual funds, go for direct purchasing, otherwise, you must hire an intermediary for better advice. They will explain to you the mutual fund guide for beginners to help you buy the best fund.

4. Monitoring Regularly

After investing, a beginner’s guide to mutual funds advises you to keep a track of the performance of your portfolio. Don’t leave everything to the manager, monitor the work regularly. We are not saying you to overdo it but stay updated with market ups and downs. Talk to your manager regularly regarding what changes you need to make in your investment and how is your portfolio performing.

5. How to Sell

Selling the mutual fund is equally hectic as buying them, but no need to worry. A mutual fund guide for beginners will explain to you about selling funds. Conder selling funds that are not performing well, you require money urgently or for that, you were investing on priority.  Lastly, you should keep tax implications in mind while selling your funds.

Beginners Guide To Mutual Fund Investment – FAQs

What is a mutual fund guide for beginners?

Ans. The mutual fund’s investment guide beginners and help new investors to invest in mutual funds smartly and get the highest returns.

What are the documents required for KYC? 

Ans. You just need an Adhaar card and registered mobile number for the KYC verification. 

What are the types of equity mutual funds? 

Ans. There are 4 types of equity mutual funds, namely, large cap, mid cap, small cap, large and mid-cap, and multi-cap mutual funds.

Which is the tax-saving equity mutual fund scheme? 

Ans. Equity-linked saving schemes offer tax benefits. Up to INR 1.5 lacs, investment is qualified for tax deduction under 80C. 

What is the lowest amount that we can invest in mutual funds? 

Ans. You can start investing in mutual funds with Rs 500.

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