Mutual Fund Do's
1) First of all go through all the page of this website to make your decision.
2) Now decide whether you are going to make onetime investment or wish to make regular investments.
3) While selecting fund, first refer to the past performance of Scheme. It will guide you how the scheme has performed in last one year, 3 years, 5 years and since inception.
4) Avoid investing in NFO, which has no past records.
5) Prefer to invest in fund rated 4 or 5 Star.
6) In last 2-3 years most of the Diversified equity funds have given excellent returns even more than 40% annualized compounded, but while making investment in Mutual Fund never expect such type of returns forever.
7) It is always better to expect around 12% to 15% annualized compounded returns and plan your investment accordingly.
8) Always prefer longer term.
9) Systematic Investment is excellent for long term.
10) If you are entering first time in Mutual Fund investments, prefer to invest in Diversified Equity Funds and avoid investing in Sector Funds.
11) As far as possible make regular investments in Mutual Fund.
12) If you are having regular Salary income or regular income from your business and able to make monthly investment always select Systematic Investment Plan of Diversified Equity Plan or Long Term Tax Saving Plan. Tax saving plan will give you additional benefits of Income Tax rebate u/s 80C up to Rs.100,000/-. For SIP investment you should have ECS enabled Bank A/c or you will have to give post dated cheques on approved locations.
13) If you are interested in making systematic investment but do not have ECS or PDC of approved locations, then in the initial stage you should make investment by filling common application form, in such case attach DD payable at approved location alongwith other required papers/documents. And then in future make regular investment by using Transaction Slip attaching with DD in the same portfolio number of the Fund.
14) If you are investing one time use only common application form and thereafter whenever you wish you can invest in the same portfolio number of the same fund or choose to invest in different fund schemes or same or other AMC.
15) In SIP mode one can invest as low as Rs.500/- per month. Over period of time such investment creates very good wealth. For example one who has invested in the Growth Fund of Reliance Mutual Fund from Oct., 1995 to Sept., 2006 i.e. for 11 years @ Rs.1000 per month, value of the Fund as of 1st October, 2006 was became over Rs.12 lacs.
16) SIP mode will give you opportunity of entry at all levels of Index.
17) For one time investment, amount varies from Rs.2000 to Rs.5000 depending on the Scheme and AMC.
18) There is no higher limit for investments.
