3 Important Financial Tips For Millennials Before Investing In Mutual Funds

Mutual Funds

Who does not like to know a little more about the sensational topic- Mutual funds? Yes, one of the safest and the hottest investment options that is available today! Ask anybody whether you wish to save, splurge, grow more money or know the tax benefits; the answer will come down to this one aspect- Mutual funds.

Why do they say that you start young? Because ‘Mutual Funds’ offers great opportunities for the millennials out there. With just a few things to keep in mind, they can easily create a life that they will cherish beyond. After all these youngsters are just a few years away to create a life of their own without any credits. 

It is always a great idea to build a fortune with the usage of mutual funds. But often there is no guidance, and they get confused when it comes to taking the first few steps right. Savepro will help you in knowing these 3 golden rules because there are so many options in the market and it becomes confusing to choose the right choice:

1. Invest With a Goal

Everything that you do has a goal. The morning walk is for health. The food on your plate is to mean to satiate your hunger. The sleep at night allows your brain to have some off-time and rejuvenate for the next day. Why should it be any different when you invest in a mutual fund, right? Mutual Funds has three types of goals: short-term, medium-term and long-term.

The long-terms goals open the doors right in front of your eyes. These goals can be anything from your education to the wedding, saving some for a home loan, and an international vacation till retirement. Savings get a bit difficult when you grow older and that’s when mutual funds come into play to have a safer financial goal.

2. Know Yourself

Every individual is different and one should know their risk profile and invest accordingly. You may be a conservative investor and invest in only debt/fixed income mutual funds. Every investor should know how much risks they can manage. Risk profiling is a crucial aspect and one should be aware of it.

3. Long-Term Better Than Short-Term

As the wise man said, Mutual funds will great when they are held back for 3-5 years or even more. In short-term, returns can be volatile especially in the equity fund side. But if you give time, funds generate stable returns over the longer durations. If your needs are long-term, you just need to be selective, choose and invest wisely.

 Millennials must be aware in the short-term financial markets, which is where mutual funds invest, can swing up and down too much. On the long-term, such swings do not really matter much. There are a lot of studies to back this up which you can read in our previous blogs.

You have to be wise in the way you use funds to minimise taxes as funds which are invested in stocks and are taxed in a way, while funds that invest in fixed income security faces a different way of taxation. For any more queries, feel free to contact us at (+91) 9810634314 or you can also drop us an E-mail at info@savepro.co.in any time!