The other day you heard about mutual funds, today you are thinking of investing in them. The first question that pops up in your mind is, which strategy to go for — pick individual funds or build up a separate customized portfolio? Quite a dilemmatic situation it is for the rookies in the investing field. Before clearing the air and letting you know which of the two strategies is gainful for new investors, I would first like to explain the subtle difference between them.
Investing in Individual Funds Vs Separate Portfolio
Investing in individual funds is mostly followed by DIY (Do It Yourself) approach and sometimes financial advisors do play their roles too. Investors must know their investment objective, risk profile, and tenure prior to investing. And, after determining these crucial parameters, the person can choose the fund category, and then hop on the scheme he wants to invest in. The individual funds’ capability of providing higher returns is the most prominent reason that lures the novice investors. So, regardless of what the objective of the fund is, who the fund manager is, and what’s the investment style of the fund, beginners tend to concentrate more on the returns part.
