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What are some mistakes people make when investing in Mutual Funds?

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What are some mistakes people make when investing in Mutual Funds?
posted Feb 27, 2018 by Vijay

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Some of the common mistakes while investing in Mutual Funds are:

  • Investing without understanding the product: For example, equity funds are meant for the long term, but investors look for easy returns in the short term.
  • Investing without knowing the risk factors: All Mutual Fund schemes have certain risk factors. Investors need to understand them before making an investment.
  • Not investing the right amount: Sometimes people invest randomly, often without a goal or plan. In such cases, the amount invested may not yield the desired result.
  • Redeeming too early: Investors sometimes lose patience or do not give the requisite time for an investment to provide the desired rate of return, and hence redeem prematurely.
  • Joining the herd: Very often, investors do not exercise individual judgment and get carried away by the buzz in the ‘market’ or ‘media’, and thus make the wrong choice.
  • Investing without a plan: This is perhaps the biggest mistake. Every single rupee invested needs to have a plan or goal.
answer Feb 28, 2018 by Sunita