Investing in mutual funds is the best option for those who want to take advantage of capital market investing to create wealth. The earlier you start, the better since the chances of you riding out equity market cycles to create wealth is high. Young investors in their 20s or 30s can take the benefit of rolling returns while investing money for a longer period of time in mutual fund schemes.
Here are 5 things which a young investor should keep in mind before investing in mutual fund schemes:
Define a purpose
If one wants to gain from mutual funds then they should invest with a definite purpose. For example, invest money towards a financial goal like wedding planning, child education, retirement or overseas vacation. This will help them in making dedicated savings for their long-term financial goals.
Holding duration
As a young investor one should know the holding duration of any MF categories (for e.g., liquid funds, debt funds, equity funds, hybrid funds, etc.) while investing their money in mutual funds against any financial goal.
