While more and more women are becoming independent with managing their own finances. More recently, they have also started to explore the prospective investment destination. Before women like you, stick your neck out in this arena, you must prepare well and get acquainted with the basic know-how of making the right choice:
1. Gain clarity about your financial objectives
The first and foremost step to start investing is that you identify and list your financial goals as per the priority. To ensure that your investments and returns are synchronised, it is important to link your investment with a specific goal. You can formulate a goal as per age, the time span of investment, financial status, and many other factors. For instance, for an experienced woman of older age, acquiring assets for retirement can be a financial goal while for a mother, an investment might mean ensuring funds for the higher education of her children.
2. Understanding the basic terms to consider the right funds
Some people tend to be attracted by the lesser Net Asset Value (NAV) of a fund, while it only affects the number of units owned by the investor. The NAV has no impact on the performance of the assets. Therefore, to invest in mutual funds, you must prefer to look at the returns and portfolio of the same. After studying the returns, make a comparison with the benchmark indices and competitive funds.
3. Understand your risk appetite, the time span of investment and desired returns
If your goals are short term, and you do not want to invest in riskier assets, then short-term debt funds can be a choice for you. While if you do not mind taking moderate risks, you can invest your funds in the equity-based mutual funds as they generally fetch you higher returns during a long-term investment.
4. Dividend or Growth Option
Some people misunderstand the dividends option as a surplus income while it is not. In fact, the dividend that is paid-out is merely the scheme’s face value, hence, it lowers the net asset value to the extent of paid out dividend.
5. What is SIP and what is better- SIP or Lumpsum investment?
As the name suggests, a lumpsum investment is an investment of a huge amount at once. It requires you to assess the risks very thoroughly and might reduce your overall returns during a downslope of the market. Whereas a Systematic Investment Plan (SIP) requires you to invest your funds in a disciplined manner at regular time intervals. SIP is the recommended option for women who are new to invest in mutual funds.
Women of all age groups and varying experience levels are keen to invest in mutual funds. Mutual funds are indeed a wise choice to station your money and hence capitalise on your hard-earned money. Use the tips given above to get some handholding if you are new in the game. Considering to invest in real estate mutual funds? RealVantage is an award-winning property co-investment platform. Start investing with them today!
